Wednesday, 3 October 2012
Religare Health Trust (Preview)
Religare Health Trust ("RHT" or the "Trust") is doing its book building now. I will do a more detailed write up when it is finally launched.
The offering statistics are as follows:
Issuer: Religare Health Trust
Sponsor: Fortis Healthcare Ltd
Issue size: 567,455,000 shares
Implied Yield 2013E : 8.46% to 9.10%
Implied Yield 2014E : 8.66% to 9.29%
Price range : $0.88 - $0.97
Expected Listing Date : 19 Oct
Just as a way of background, Fortis lost to Khazanah in 2010 over the battle of Singapore's Parkway. Fortis is now launching its Trust into the Singapore market.
RHT is the first business trust with an initial portfolio of healthcare assets in India to be listed on the mainboard here. It consists primarily of Indian healthcare assets (2 hospitals, 11 completed clinical established with another 4 in the pipeline).
My "off-the -cuff" comments:
Indian listings have not done well traditionally on SGX
Indian listings have traditional not done well. Looking at how Ascendas Indian Trust, Indiabulls, Meghmani have performed.Very scary. In fact, the Reliance Communications Ltd aborted its IPO plan in July this year, citing weak market conditions. More likely it meant "weak demand". Investors who have 'bought and hold' the above counters will probably be crying. "Make Money - Meghmani" become "Lose Money". The 5 year chart of Meghmani is below for reference. IPO price was 28c.
Given that the assets are all located in India, the revenue and profits are priced in INR, thus investors here will be exposed to forex risk. This is the 5 year forex chart and you can see that INR has depreciated very significantly against the SGD.
My wish list was that they should have followed IHH Berhad's example and list a diversified portfolio of hospital assets which we are more familiar with instead of purely Indian assets.
India is no longer an "in" country
India has currently lost its flavor with Investors because of confusing legislation and tax regime. You won't know if RHT becomes hit with these.
Anyway, precisely because of the above reasons, the Trust will need to attract potential investors with higher yields. Unfortunately, with 10 Year Indian government bond trading at more than 8%, i really can't see why the Trust will be attractive to investors who want Indian exposure.
Preliminary Conclusion - Avoid
I will give it a miss but unfortunately i will probably be allocated some. hahaha.... :)