India Value Fund Advisors (IVFA) may invest up to Rs 500 crore ($100 million ) in Manipal Hospitals, the third-largest domestic healthcare service provider, as the latter holds talks with private equity (PE) firms to accelerate expansion plans.
IVFA, with $1.4 billion in assets under management, is bullish on healthcare and has pursued deals, including buyout opportunities, in the sector. The PE firm may back Manipal to chase buyouts in an industry where many smaller chains and standalone hospitals are open to deal making.
Ranjan Pai-led Manipal Hospitals is expected to finalise a fund raising move within three weeks, with IVFA seen as a front runner, said three separate sources briefed on the matter. “They are in active discussions with three funds, including IVFA and an agreement may be reached soon. The initial deal may fall anywhere between Rs 250 and Rs 500 crore,” added one of the sources mentioned earlier.
Manipal may fetch about Rs 1,500 crore valuation, giving the new investor a fairly large minority stake.
Kotak Private Equity has around 15% stake in the company and could sell a part of it. But this could not be confirmed.
A top Manipal official declined to comment, when contacted. IVFA cold not be reached immediately.
Manipal has over 4,400 beds across 17 hospitals and serviced 1.8 million patients last year.
The chain owns 11 hospitals while the rest are on management contract. Manipal’s annualised revenue is estimated at Rs 580 crore with Rs 85 crore in Ebitda.
Last year, both IVFA and Manipal were in the fray to buy Ahmedabad-based Sterling Hospitals. UK private equity Actis, which owned a majority in Sterling, has put the regional hospital chain on the block even though a deal is not concluded.
IVFA also holds a small stake in Dubai-based DM Healthcare, founded by doctor-turned-entrepreneur Azad Moopen, which is now expanding in India. Private equity firms like Apax Partners as well as Singapore (GIC) and Malaysian (Khazanah ) sovereign wealth funds have struck investment deals in India’s healthcare industry, where Apollo Hospitals and Fortis Healthcare are the leaders.
Source: Times of India