Tuesday, December 22, 2015
Aster DM Healthcare, a Dubai-headquartered healthcare group promoted by NRI physician and businessman Azad Moopen, is in talks with private equity investors to raise $200 million, three people with direct knowledge of the development said.
"The company is in talks with top PE funds to raise money through a pre-IPO round," said a person involved in the deal.
Aster plans to raise $250-300 million, or about Rs 1,650-2,000 crore, through an initial public offering next year, the sources said.
The company is being valued at $3 billion, making it the second largest healthcare service provider in the country.
Aster is among the top healthcare groups in Middle East with a chain of hospitals, pharmacies and clinics. In India, it has six hospitals in Kochi, Kozhikode, Bengaluru, Hyderabad, Pune and Kolhapur with a combined bed capacity of over 2,500 beds.
Aster DM Healthcare is 36% owned by private equity investors India Value Fund Advisors and Olympus Capital. In 2008, IVFA invested $50 million in the company. It part sold its stake to Olympus in 2010 when the incoming fund pumped in $100 million into the company.
Promoters led by Dr Moopen own around 52.3% stake in the company. Other individual and institutional investors hold around 12% stake in the company.
"IVFA and Olympus will sell part of their stake in the company," a second person involved in the process said. "Since the IPO is still another eight to ten months away, this (pre-IPO) would help them benchmark the public issue too."
According to the third source, the institutional interest in the company is high and hence there are no benchmarking issues. The person said final decision on pre-IPO round will depend on whether the company needs capex before the slated fund raise. "Currently the bankers are talking to other global PE funds. A final decision will be taken in January," the person said.
Investment banking arms of Bank of America Merrill Lynch and Kotak Mahindra Capital Co are handling the issue.
Growing at a compounded annual growth rate of 41% in the last three years, Aster earned revenues of $650 million (overRs 4,200 crore) in 2014-15. Around 90% of the revenues came from markets outside India.
The company is looking to expand its operations in India with a thrust on medical tourism. It has invested Rs 550 crore in Aster Medcity at Kochi, where 17% of the revenues are earned through medical value tourism. The company has also invested Rs 230 crore in its greenfield hospital project at Bengaluru, which is expected to be fully operational by the fourth quarter of this financial year.
Funds like IVFA and Olympus are expected to make more than five times their investments from Aster DM Healthcare.
Other private equity backed healthcare and diagnostics services companies in the process of giving investors exit include Dr Devi Shetty-promoted Narayana Healthcare that is in the midst of an public fund raise and Advent Capital-backed Care Hospitals that is up for sale. Global Healthcare is slated to launch its IPO backed by Premji-Invest, Temasek and India Build Out Fund. CX Partners-backed Thyrocare and Westbridge-backed Dr Lal Pathlabs are among diagnostics chains where PE exits are lined up.
As per the annual snapshot by PwC India, healthcare deals went up 83% to $1.58 billion this year from $865 million in 2014. "Considering the levels of PE activity the year 2015 has seen, it maybe natural to assume that the momentum would continue in 2016 - it may, but that can't be taken for granted. E-commerce fund raising slowed down at the tail end of the year and that will test the depth of the market in 2016. While financial services, technology and healthcare continue to see sustained activity (and could even better their 2015 numbers)," PwC said in its report released on December 16.
economictimes.indiatimes.com
