Fortis Healthcare Limited announced on Wednesday, July 23, that it has entered into an operation and maintenance (O&M) services agreement with Gleneagles Healthcare India Pvt. Ltd. (GHIPL) for managing five hospitals and one clinic operated by GHIPL in India.
According to the filing with the stock exchanges, Fortis will provide O&M services at these facilities, earning a monthly service fee of 3% of the net revenue of the hospitals, exclusive of taxes. The agreement is domestic and is on an arm’s length basis, as confirmed by an independent financial advisor.
GHIPL is a subsidiary of IHH Healthcare Berhad, which is also the parent entity of Fortis’ promoter, Northern TK Venture Pte Limited — making this a related party transaction.
The agreement is expected to increase Fortis’ geographical footprint and beds under management while creating incremental revenue streams and leveraging operational synergies.
Key details of the deal:
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Fortis will manage 5 hospitals & 1 clinic owned by GHIPL.
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Fortis earns 3% of net revenue of these hospitals as service fees.
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GHIPL and Fortis are both ultimately owned by IHH Healthcare.
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Total consolidated revenue (FY25): Fortis — ₹7,782.8 crore; GHIPL hospitals — ₹718.5 crore.
The agreement covers not just O&M services but also outlines provisions for brand licensing and expense reimbursements, all aligned with market standards.
Fortis said this arrangement is expected to boost its operational presence and profits through direct service fee income, while ensuring compliance with related-party transaction norms.
