A clutch of private equity firms and a large Indian corporate house, have initiated separate discussions to buy out Cumballa Hill Hospital & Heart Institute, a 50-bed hospital located at posh South Mumbai, two people familiar with the matter said.
The management of Cumballa Hill Hospital has valued the company at around `250 crore, one of the executives privy to the development told ET. When contacted, Vijay Shetty, managing director of the institution whose family runs the hospital, said: “We are not in discussions with anybody.” He declined to comment further on the development. Cumballa Hill, which is managed and run by a trust, is one of South Mumbai’s popular hospitals and specialises in heart ailments.
Started by cardiologist and founder trustee KR Shetty, it has acquired the adjacent property and is also in the process of building a 220-bed multispeciality hospital with a helipad facility for air transport, as per its website.
But the hospital has been plagued by insufficient cash flow and is facing competition from a series of new corporate hospitals peppered across India’s financial capital, one of the executives seeking anonymity said.
Delhi-based Fortis healthcare, owned by billionaire brothers Malvinder and Shivinder Singh, was also interested in the asset, but did not pursue it further due to the huge gap in the valuations. However, Fortis Hospital CEO Vishal Bali said he is not aware of any discussions with Cumballa.
Although there are legal restrictions on an outright sale of a hospital run by a trust, several such hospitals in the country have been sold through various deal structures, notably Moolchand Hospital and Escorts Heart Institute in Delhi. But a member of the Nanda family, that ran the trust operating Escorts Heart Institute, has challenged the deal and the matter is pending with the Supreme Court.
Source: Economic Times