On the evening of 12-12-12, Prasanth Manghat, the Group CFO of NMC Healthcare, was honoured with ‘CFO of the Year’ medal, on the occasion of Middle East ICAEW Accountancy and Finance Excellence Awards. He tells Joyce Njeri the recognition did not come easy, having been instrumental in the rigorous journey towards the historic listing of his company on the London Stock Exchange…
PRACTICAL CONCERN: “We needed to raise the funds to enable us to implement our exciting growth plans which included developing new and existing facilities and funding future growth opportunities.”
PRASANTH MANGHAT is a man on fire. Barely a year after joining NMC Healthcare as the Chief Financial Officer, he led the company toward its successful listing on the London Stock Exchange, and also gone on to achieve the highest finance honours within the industry.
At the recent accountancy and finance excellence awards ceremony hosted by the Institute of Chartered Accountants in England and Wales (ICAEW), Prasanth edged out other industry heavyweights, which saw him clinch the most sought-after title of the ‘CFO of the Year’.
Journey to IPO
But despite his achievements, Prasanth has always remained candid and down-to-earth, firmly attributing his successes to his deep-rooted faith in God.
“I am a God fearing man and I believe in his divine direction,” he firmly affirms.
Last year, NMC Healthcare raised £117 million (Dh688.5 million) from an initial public offering (IPO), becoming the first Abu Dhabi-based company to trade shares on the premium segment of the London Stock Exchange.
“I joined NMC as CFO in April 2011 and my primary focus with the finance team was to restructure the balance sheet before June 2011. In December 2011 the board issued the clearance to go for an IPO in London and the target date fixed was less than 100 days away, including all intervening holidays,” the CFO narrates about the jittering process towards the successful listing.
Implementing growth plans
In an exclusive interview with Accountant Middle East, the CFO proudly talks about his team’s ‘remarkable’ feat that drove the companyfrom dire circumstances to steady growth.
“We needed to raise the funds to enable us to implement our exciting growth plans which included developing new and existing facilities and funding future growth opportunities. For any healthcare provider, the availability of capital and the achievement of steady growth are the key objectives. But in 2009 through to 2011 liquidity was tight,” Prasanth says.
“We sketched out a plan to support our planned growth which combined both equity and debt. After detailed studies we concluded that we needed to launch an IPO to fulfill our equity needs. A lot of preparatory work was done in 2011 including the identification of advisors, preparing the documentation process, ensuring that our reporting system met with International Financial Reporting Standards (IFRS) compliance, as well as upgrading our investor relations and PR capabilities,” he adds.
Funding for expansion
On its IPO debut, the company sold 55.7 million shares at 210 pence each. Deutsche Bank AG (DBK) was the global coordinator and book-runner of the sale, while Numis Securities Ltd and Shuaa Capital PSC (Shuaa) were the lead managers.
“We had a large group of advisors covering our legal, accounting, audit, investment, registration, printing and other needs. The team in NMC that co-ordinated all the work was small but we toiled day and night until the IPO launch date.”
“I should add that while all this was going on as an additional line of funding for our expansion, we also arranged an unconventional debt of $150 million which was completed at end of March 2012. We completed our listing on the LSE on April 5, 2012 and thus completed the assignment before the target date,” the executive says.
Wide network of hospitals
NMC Healthcare is engaged in business sectors ranging from healthcare, trading and information technology. Since its inception in 1975, it has evolved into an integrated healthcare company with a wide network of hospitals, medical centres, and pharmacies across the UAE. It also has affiliate companies serving business sectors such as healthcare, financial services, pharmaceutical manufacturing, hospitality, real estate and media.
“We have seen tremendous progress from UAE administration to boost both the quality and quantity of healthcare in the country and in particular to encourage more private sector providers. NMC was the first private healthcare provider, having been established 38 years ago, and is only three years younger than the UAE itself,” the CFO says.
Speaking about his triumph at the Middle East ICAEW Accountancy and Finance Awards, Prasanth says the experience “was like the perfect dessert at the end of a sumptuous lunch”.
“Our advisors for the IPO felt I had a good chance of winning the award and made the nomination. I was of course initially flattered when they suggested the idea. I felt that if I were to win, it would be a prestigious moment for me and my team, as well as my family who have always supported me.”
“When my name was called out, the initial feeling was that of excitement. Afterwards I was filled with joy and it downed on me about the accomplishment. I have worked really hard and achieved a number of goals. So for me it is a great personal accomplishment and I am happy I could make my team and my organisation proud,” he says.
Timely disclosure of finances
CFO OF THE YEAR: “Our advisors for the IPO felt I had a good chance of winning the award and made the nomination.”
Prasanth edged out top class CFOs in the country, including James Rigney of Etihad Airways and Yuvraj Narayan from DP World, to emerge the winner in the category.
In their selection process, the panel of judges commented; “This award goes to an individual who continuously shows great leadership skills. He was also instrumental in the successful listing of the company he works for in the premium segment of FTSE 250 on the London Stock Exchange in 2012.”
“It is clear to me that the main achievement which helped me to win the award was my role in helping to get the first UAE based corporate listed in the premium section of the London Stock Exchange.”
“I am humbled by winning this award, and see it as a benchmark on which to build future achievements. I will focus this year on delivering the highest level of corporate governance, transparency and quality, and timely disclosure of our finances. I will also strive to make sure that these objectives are embedded in our system and form part of our ethos and the overall culture of the organisation. Among my goals for 2013 are… to reassure our new stakeholders that their trust in us is deserved and to demonstrate to our regulators that we apply and deliver best practices.”
Business Finance Team of the Year
It was a double win for NMC Healthcare during the ICAEW awards night. Besides bagging the ‘CFO of the Year’ gong, the company also won in the ‘Business Finance Team of the Year’, beating top companies including DHL, the global market leader in the logistics industry, and UAE’s flag carrier Etihad Airways.
Prasanth’s eyes light up when talking about the moment when his team was named the overall winner.
“The best moment was when our finance team also won the award for the ‘Business Finance Team of the Year’. Our core senior team of Suresh Moorthy, Deepak Ghosh and Suresh Kumar were also there and as you can imagine this was a great moment for all of us. The following day the entire team celebrated in the office. Dr Shetty, our CEO and founder of NMC, was away but called to offer his congratulations. I was proud that finally our hard work paid off,” he says.
“At NMC, we work as a team and particularly when we know that it is of utmost importance for the organisation. We leave our personal needs and egos behind, and contribute as a team. This spirit of team work has been instilled by our CEO and founder Dr B.R. Shetty who is always an inspiration to us and encourages a selfless attitude. To list an entity in LSE premium segment in less than 100 days was certainly a challenge, but we did it successfully,” he says.
Routine operational matters
He says his closeness with his CEO has had tremendous effect in his performance.
“The CFO is seen by the CEO as a partner to create strategies for the organisation and to drive performance. This relationship is essential for creating success in the corporate world as a whole. To manage the new relationship, CFOs need to master some professional and personal skills.”
“Like any CFO, I have to work closely with my CEO not only in the financial sphere but also on key business decisions. This is particularly the case in NMC as we are growing very fast. Other than that, my role includes risk assessment and management, ownership of budgets, identifying processes in the systems which require correction, bank relations, project execution, efficiency drives, new partnerships, as well as audits and routine operational matters. After IPO, my work now includes investor calls and meetings, discussions with analysts, meeting with advisors to identify enhancements in our corporate governance, and so on.”
“The CFO has to bring a forward looking and pro-active stance to managing the corporate finances. Post- the global financial crisis, the biggest challenge for any business has been the ability to negotiate uncertainties. New leadership skills and openness to adapt to new ways of doing business are vital. Thus the finance function and the role of the CFO also has evolved and expanded. Today the CFO is critical in setting strategies of the organisation with the CEO and providing the financial acumen and expertise for funding those initiatives, right up to their execution. The CFO is expected to support the decision making process and performance insights that will improve bottom line results.”
“As Charles Darwin said; “Those who learned to collaborate and improvise most effectively have prevailed,” and this is definitely true for a CFO. It is challenging to collaborate and maintain independence, but a successful CFO has to balance both. At the same time the CFO should understand the goals and plans of the CEO and provide him with the necessary information and assistance he needs,” he enthuses.
A new dimension
The CFO credits his CEO and his family in particular, “which has been his inspiration throughout your career.
“Many people have influenced my career and life. My brother, even though he is slightly younger than me, motivated me by helping me to appreciate every positive thing I did, right my childhood days. My CEO Dr B.R. Shetty’s vision and acumen in business and how to deal with challenges along the way has also given me a new dimension to the way I think about business solutions,” he says.
And how does he unwind after a hard day’s work?
“Reading is my passion. The last few years have been very demanding for me as far as my job is concerned and hence I have not had much time to spend with the family. So whenever I get the chance, I spend quality time with my children,” Prasanth says.
