Investors in UAE hospital chain Aster eye $300 mln India stake sale-sources (updated)

Max Healthcare Institute

26/05/2023 10:45

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      Aster investors eye selling 30% stake in India biz
    

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      Company has appointed investment bank Moelis for the deal
    

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      Talks come as investors attracted by India healthcare
space
    

  
 (Adds context on industry, source feed on potential deal)
    By M. Sriram
       MUMBAI, May 26 (Reuters) - Investors in Aster DM
Healthcare  ATRD.NS  are in talks to sell a 30% stake in the
company's India business for about $300 million, two sources
with direct knowledge said, the latest potential deal in India's
booming healthcare sector.
    UAE-based and Mumbai-listed Aster runs 32 hospitals, 127
clinics and 521 pharmacies in India and the United Arab
Emirates. The current talks are related to the India business
and come just as Aster tries to demerge its Gulf business and
sell a majority stake in that, Reuters reported last month.  
    Aster and its advisors have reached out to private equity
giant KKR & Co Inc  KKR.N  and Max Healthcare Institute
 MAXE.NS  - one of India's largest hospital chains - to hold
preliminary talks to take up the investors' stake, the sources
said.
    Aster's investors considering the sale are Olympus Capital,
which has a 19% stake in the company, and Mauritius-based
investment firm Rimco, which holds an 12% stake.
    Aster has appointed New York-based investment bank Moelis &
Company to manage the deal, said the two sources, who declined
to be named as the discussions are private.
    Spokespersons for KKR and Olympus declined to comment, while
Aster, Rimco, Moelis and Max did not respond to Reuters queries.
        In India, private hospitals are much sought after and
with federal spending on healthcare low, investors remain
bullish on the sector's growth in a country of 1.4 billion
people.
  
        In April, Singapore-based Temasek 
    spent $2 billion
     on a controlling stake in Manipal Health Enterprises. And
last year, KKR clocked its biggest exit from India by selling
its stake 27% stake in Max Healthcare for more than $1 billion. 
  
        Indian hospital chains have raised $2 billion from
private equity funds this year, compared to last year's record
funding of $3.2 billion, data from Dealogic showed.
  
        "Compared to population healthcare is still
underpenetrated in India. So as the country develops, investors
see that as a big opportunity," one of the sources said.
  
        Separately, as discussions progress for the 30% stake
sale in the India business, Aster will gauge if other hospital
chains are interested in taking a bigger stake in the healthcare
operator, though the strategy has not been finalised, the first
source said.
  
        Aster is mainly present in the southern Indian states of
Kerala and Andhra Pradesh. It competes with other large hospital
chains including Fortis Healthcare  FOHE.NS , Manipal Hospitals
and Max, all of whom have raised funds from global investors in
recent years.
  
        "Aster is now the last remaining large hospital chain
where private equity or strategic investors can come in. There
aren't many other established chains," the first source said.
  
        For the fiscal year ended March 31, Aster's revenue grew
16% to $1.46 billion, while its net profit stood at $51.36
million.
  



 (Reporting by M. Sriram; editing by Conor Humphries and Jason
Neely)
 ((Sriram.Mani@thomsonreuters.com;; Reuters Messaging: Twitter:
@followthemani))