India Value Advisors to invest $179m in Manipal Hospitals
India Value Advisors (IVFA) will commit about INR10 billion ($179 million) to Manipal Hospitals over a three-year period, enabling the healthcare provider to more than double its hospital bed capacity. Part of this increase will come through acquisitions.
Rajen Padukone, CEO of Manipal, told LiveMint that the company is concluding talks with IVFA over an initial investment of INR2 billion expected before the end of September. Although Manipal has spoken with other private equity firms, the full INR10 billion is likely to come from IVFA.
Manipal runs about 15 hospitals, mostly in India's southern states, and wants to expand into Bhubaneswar, Indore and Pune. Padukone said that the company is in discussions to buy a majority stakes in 6-7 hospital chains in different parts of the country. He wants to increase Manipal's bed capacity from 1,600 to 4,000 in the next three years, with 600 coming from the expansion of existing facilities.
The company has received INR3 billion from Kotak Private Equity and other investors since 2005. It has also borrowed INR2.5 billion from State Bank of India and Yes Bank.
According to AVCJ Research, private equity firms committed $448 million to Indian healthcare companies across 12 deals in the first four months of 2012, surpassing last year's total of $333 million. Hospitals and healthcare centers accounted for just five transactions, but more than 80% of capital deployed. However, identifying suitable targets and getting them to scale up remains a challenge.
Leading transactions include Advent International's $105 million investment in CARE Hospitals, Government of Singapore Investment Corp's (GIC) $100 million commitment to eye-care specialist Vasan Healthcare, and Olympus Capital Asia's $100 million investment in DM Healthcare, a chain of hospitals, medical centers and pharmacies in India and the Middle East.
Apollo Hospitals, India's largest hospital chain, said earlier this month that it was in talks with private equity firms with a view to raising INR30 billion.
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