SINGAPORE (Oct 6): Fullerton Healthcare Corp has lodged its draft listing prospectus on Sept 28, indicating its intention to sell 140.3 million shares, excluding the overallotment option, at an “indicative” price of $1.73 a share.

With a total share base of 742.6 million, this will value the company at $1.285 billion, making it the seventh largest healthcare stock in the local market.

The largest, by far, is IHH Healthcare, which has a market value of some $18 billion. Raffles Medical Group, the 40-year-old stalwart of private medical practice in Singapore, is worth around $2.7 billion.

Fullerton was founded in 2010 by two medical doctors — group CEO Michael Tan, and group deputy CEO Daniel Chan. The vice-chairman of the company is David Sin, whose SIN Capital has been its main backer and is currently its largest shareholder.

Fullerton’s business is in the enterprise healthcare management sector. In essence, the company’s revenue comes from companies that provide medical benefits to their staff and also from insurers underwriting healthcare plans. The company now has around 200 clinics across the region, which the staff of its clients can attend when they fall ill.

The staff of its clients can also go to 8,000 third-party “panel” clinics overseen by Fullerton. These panel clinics pay Fullerton a management fee that varies, depending on the processes that Fullerton helps handle. Fullerton helps its clients as well as doctors with administrative work related to payments and processing of claims.

Fullerton says it has some 25,000 corporate clients, including flag carrier Singapore Airlines and integrated resort operator Marina Bay Sands. Its single largest client, who contributed more than one-fifth of its revenue last year, is insurer AIA Singapore.

However, the same draft listing prospectus warned that investors may suffer dilution from US$50 million ($68.7 million) worth of convertible bonds issued to GIC, and revealed some legal cases that the group has been involved in.

To find out if Fullerton Healthcare is a worthwhile investment, grab this week’s copy of The Edge Singapore (Issue 749, Oct 10), available at major bookstores, 7-11 stores, and selected petrol stations.