Khazanah-backed fund part exits India's Apollo Hospitals for $160m

Public market data shows that IHH sold about 8.4 million shares of Apollo for INR1,267.46 apiece, a discount to the previous day’s closing price of INR1,315. The buyers were undisclosed, though a subsidiary of Deutsche Bank was recorded as purchasing 3.9 million shares at INR1,267 each the same day.

IHH initially invested in Apollo in 2005, paying INR1.9 billion. The fund later paid INR4.7 billion in 2011 for an 8.8% stake in Apollo held by Bisikan Bayu Investments, another Malaysian government fund. According to a separate disclosure, the sale will leave IHH with a 4.8% stake in Apollo.

IHH operates more than 40 hospitals worldwide in emerging markets, including Malaysia, China, India and Iraq, and developed countries such as Hong Kong and Turkey. Its other India hospital assets include Ravindranath GE Medical, which operates five hospitals under the Global Hospitals brand – bought for INR12.8 billion in 2015 – and Continental Hospitals, also acquired in 2015 for INR3 billion.

Apollo is India’s largest hospital chain, with over 9,500 beds across 69 hospitals nationwide. In its most recent annual report the company recorded revenue of INR54 billion for the year ended March 2016, up from INR46 billion the year before. Over the same period profit rose from INR3.5 billion to INR3.7 billion.

The company has received significant backing from Apax Partners, which invested $170 million over several tranches starting in 2007 and eventually reached a 19% stake in the company. The GP then exited its stake over several years, eventually realizing a 2.5x capital return and 20% IRR by the time of its final exit in 2013.

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• Topics
• South Asia
• Healthcare
• Open market
• India
• Khazanah Nasional
• Exit