Paras Hospitals is on the verge of filing draft papers for its initial public offering (IPO) with the Securities and Exchange Board of India (SEBI), reported MoneyControl.

The North India- focused healthcare services company aims to raise funds for expansion and facilitate an exit for its private equity investor, Creador.

“Paras Hospitals is in the last stages of finishing its draft red herring prospectus (DRHP) and the document is likely to be filed with SEBI in the next two to three weeks,” a source familiar with the matter disclosed.

 The IPO could generate approximately Rs10bn ($130m), with the company seeking to raise between Rs3bn-4bn ($39m-$52m) in fresh capital.

The fresh capital raised will be allocated to fund capital expenditure and repay debt.

“Paras had a net debt of around Rs4bn ($52m) as of 31  March 2024,” the source added.

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An email sent to Paras Hospital regarding the IPO did not receive a response by press time, reported the media outlet.

This latest news follows the recent commissioning of a new hospital in Kanpur and the initiation of operations in Srinagar last year.

Paras Hospitals, which inaugurated its first facility in Gurugram in 2006, currently operates seven multi-super-specialty hospitals with over 2,000 beds.

The company is also planning to expand into Uttar Pradesh, eyeing growth opportunities in tier 2 and tier 3 towns.

“There are a lot of places in Uttar Pradesh such as Noida, Meerut, Agra, Varanasi, Lucknow, Prayagraj, and Gorakhpur that the hospital chain is exploring,” another source mentioned.

Creador, which invested Rs2.75bn ($36m) in Paras in 2017 and holds a 25% stake, is seeking a substantial exit through the IPO.

This move comes after an earlier attempt by Creador to sell its stake in the company. In May 2023, it was reported that Creador had appointed an investment bank to find buyers for its stake in Paras.