Latest news with #GHIPL

Business Standard

IHH inks Fortis-Gleneagles O&M deal to strengthen pan-India platform

Under the agreement, Fortis will manage operations of six Gleneagles hospitals and one clinic, earning a monthly fee and expanding its bed capacity and national presence Sanket Koul New Delhi In a bid to consolidate its healthcare presence in India, Malaysian healthcare major IHH on Wednesday announced an operation and maintenance (O&M) services agreement between its two subsidiary companies—Fortis Healthcare and Gleneagles Healthcare India (GHIPL). As part of the agreement, Fortis will manage the operations of five out of the six hospitals and one clinic under the Gleneagles India network. The agreement will become effective for the sixth hospital—Gleneagles BGS Hospital in Karnataka—upon receipt of acceptance and acknowledgment from certain third parties. The move expands Fortis' geographic footprint by increasing beds under its management, and provides incremental revenue and improves profitability through direct service fees. As part of the deal, Fortis will be entitled to receive a monthly service fee at the rate of 3 per cent of the net revenue of GHIPL's hospitals business on a consolidated basis, which stood at Rs 718.5 crore as of March 31, 2025. Fortis' consolidated revenue stood at Rs 7,783 crore for the full financial year 2024–25 (FY25), of which Rs 6,528 crore came from its hospital business. The healthcare major currently has 4,750 operational beds, including O&M beds, in 27 facilities. It recorded 69 per cent bed occupancy, generating an average revenue of Rs 2.42 crore per occupied bed in FY25. The Delhi-based chain, however, added that the arrangement with Gleneagles is being done on an arm's length basis, as determined by an independent financial adviser. 'The arrangement does not entail any acquisition and is only for the provision of O&M services,' Fortis said in a regulatory filing on the exchanges. The filing also stated that GHIPL shall bear all third-party and out-of-pocket expenses incurred by Fortis, in the manner laid down in the definitive documents. Commenting on the deal, Prem Kumar Nair, group chief executive officer of IHH, said the O&M services agreement reflects the company's commitment to long-term growth in one of its most important markets. He added that this is being done by deepening collaboration to enhance patient care and outcomes and drive greater operational efficiencies.