Aster DM Healthcare investors in talks to sell 30% stake in India business

Investors in UAE-based and Mumbai-listed Aster DM Healthcare have initiated talks to divest a 30% stake in the company’s India business, according to a Reuters report.

Aster DM Healthcare investors Olympus Capital and Rimco have reached out to private equity behemoth KKR and strategic player Max Healthcare, added the report, quoting sources privy to the development.

Olympus currently holds a 19% stake in the company, while Rimco’s stake amounts to 12%.

The transaction is being facilitated by New York-based investment bank Moelis & Company, stated the report.

Aster DM, established in 1987, currently operates as many as 32 hospitals, 127 clinics and 521 pharmacies in India and the United Arab Emirates.

Talks gain steam as Aster kickstarts the process to demerge its Gulf business from that of India.

Multi-specialty hospitals in India are trying to amass huge funding from investors as they look to capitalise on the abatement of the pandemic and the growing unmet demand for healthcare services in the country.

M&A activity in the booming healthcare segment in India has picked up actively since last year. The need for funding within the sector, say experts, has gone up as hospitals rush to cash in on the huge pent-up demand for various treatments that had taken a backseat during the COVID-19 crisis.

Temasek recently made headlines when it acquired an additional 41% stake in Manipal Health Enterprises, taking its total holding to 59%. Among other deals in the sector this year, IIFL PE, a private equity fund managed by IIFL Asset Management Limited (IIFL AMC), invested $70 million in Sri Kauvery Medical Care (India) Limited, which owns the Kauvery Hospitals chain.

Last year, Ontario Teachers’ Pension Plan (OTPP) acquired a significant majority stake in the Sahyadri Hospitals chain from the Everstone Group in India last year. Interestingly, the deal had marked the Canadian investor’s first control private equity buyout in the country.

Amongst transactions that are currently on the road KKR, ChryCapital and TPG, among others, are said to have joined the race to pick up a stake in the Indian single-speciality hospital chain Centre for Sight. Recently, Baring PE Asia (BPEA) made headlines when it initiated talks to invest in the Indian fertility clinic chain Indira IVF.

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