| KUALA LUMPUR, July 12
KUALA LUMPUR, July 12 IHH Healthcare Bhd
, Asia's largest hospital operator, is expected to
achieve a rich pricing on Thursday ahead of its up to $2.2
billion listing as strong investor interest reinforces
Malaysia's gloom-defying IPO market this year.
Institutional demand for the world's third-largest IPO in
2012 was 80 times larger than the amount of shares offered,
according to two sources familiar with the deal, excluding the
amount set aside for its 22 cornerstone investors.
That should result in a price at the top end of the
indicative range of 2.67 to 2.85 ringgit per share as IHH
prepares to debut on the Malaysian and Singaporean bourses on
At 2.85 ringgit per share IHH would have a market value of
22.9 billion ringgit ($7.2 billion), making it the world's
second-biggest listed healthcare provider after U.S. hospital
operator HCA Holdings Inc.
"The book is way, way, way covered at the high end," said
one of the sources, who declined to be identified. "The majority
of the demand comes from domestic and international long-only
funds. International demand is around 60 percent and there's
little price sensitivity."
IHH, behind only Facebook Inc and Malaysia's Felda
Global Ventures Holdings Bhd's in market debut size
this year, has attracted investors ranging from sovereign wealth
fund Kuwait Investment Authority to International Finance Corp
, the private investment arm of the World Bank.
Malaysian IPOs have managed to defy the global gloom partly
due to the government's heavy hand in the economy, deep local
pension funds and the large role of domestic investors.
The healthcare arm of Malaysia's state investor Khazanah
Nasional, IHH is one of the few available plays on the
healthcare sector in the region, where rising incomes and an
expanding middle class are boosting demand for better services.
Thailand's Bumrungrad Hospital PCL recently saw its
entire 25 percent stake worth around $143 million in Bangkok
Chain Hospital snapped up through an accelerated book-build in
just a few hours.
With its dual listing in Singapore, IHH joins Kuala
Lumpur-listed KPJ Healthcare Bhd, Singapore's Raffles
Medical Group, Bangkok Dusit Medical Services
and India's Fortis Healthcare among major listed Asian
IHH's IPO consists of 2.23 billion shares with an
over-allotment option of up to 170 million shares, putting the
total offering at $2.16 billion.
IHH, which counts Japan's Mitsui & Co and
Dubai-based Albraaj Capital as shareholders along with Khazanah,
embarked on an aggressive overseas shopping spree in recent
It added Turkish hospital group Acibadem AS,
Singapore's Parkway Holdings and India's Apollo Hospitals
Enterprise Ltd to its local holdings Pantai Hospitals
and International Medical University.
"In terms of scale it is unprecedented. On valuation it is
not cheap," said Chua Jen-ai, a Singapore-based equity analyst
Swiss wealth manager Julius Baer.
"The valuation at the high end gives the benefit of doubt to
IHH's execution and if the earnings fall short -- for example if
growth in Turkey or the earnings ramp up at the new Mount
Elizabeth Novena (in Singapore) are less-than-expected -- then
the IPO would seem a bit expensive."
IHH's listing will cement Malaysia as the Asia-Pacific
region's hottest new issue market this year, outpacing both
Shenzhen's ChiNext board and traditional IPO giant Hong Kong.
Felda's successful debut late last month came in sharp
contrast to the tumble in equity capital markets activity and
pulled deals in Hong Kong, London and Singapore.
Bank of America-Merrill Lynch, CIMB and
Deutsche Bank are the lead global coordinators for
the IHH listing, with Credit Suisse, DBS,
Goldman Sachs and Maybank acting as joint