Fortis Healthcare Limited has entered into an Operation and Maintenance (O&M) services agreement with Gleneagles Healthcare India Pvt. Ltd. (GHIPL) to oversee operations at five hospitals and one clinic currently managed by GHIPL across India.
Fortis will provide comprehensive O&M services under this agreement and will earn a monthly service fee equal to 3% of the net revenue generated by these healthcare facilities, excluding applicable taxes. The transaction has been independently reviewed and deemed to be on an arm’s length basis.
This agreement constitutes a related party transaction, as GHIPL is a wholly owned subsidiary of IHH Healthcare Berhad, which is also the parent company of Northern TK Venture Pte Ltd, the promoter entity of Fortis.
Scope: Fortis will manage 5 hospitals and 1 clinic operated by GHIPL in India.
Revenue Sharing: Fortis will receive 3% of net revenue from the facilities as monthly service fees.
Ownership Structure: Both Fortis and GHIPL are subsidiaries of IHH Healthcare Berhad.
Financial Snapshot (FY25):
Fortis consolidated revenue: ₹7,782.8 crore
GHIPL hospital revenue: ₹718.5 crore
The agreement also includes terms related to brand licensing and expense reimbursements, all in line with prevailing market standards.
Fortis noted that the arrangement will enable the company to expand its geographical footprint, increase the number of beds under management, and create additional revenue streams, while also leveraging operational synergies across both entities.
“This strategic collaboration aligns with our growth objectives by enhancing our operational presence and unlocking incremental value through service fee income,” the company stated. “It also ensures full compliance with related-party transaction regulations.”