Temasek increases holding in India's Manipal Health
Temasek Holdings is set to become the majority shareholder in Indian hospital operator Manipal Health Enterprises, having agreed to acquire an additional 41% stake in the company. The transaction facilitates an exit for TPG Capital, but the PE firm will re-invest from its latest fund.
Financial details were not disclosed, but several media reports put the price at INR 163bn (USD 1.99bn), which equates to an overall valuation of around INR 398bn. It is said to be the largest-ever investment in India’s healthcare sector.
Temasek already owns 18% of Manipal Health through Sheares Healthcare Group, an independently managed portfolio company. According to AVCJ Research, it accumulated the bulk of this holding in 2017 by taking out a stake held by True North for INR 10bn. TPG invested two years earlier, committing around INR 9bn from its sixth Asian fund for a 24.75% interest.
While Fund VI will make a full exit, TPG has agreed to put in new capital from its eighth pan-regional fund, which reached a first close of USD 3.4bn last November against an overall target of USD 6bn. The fund will hold an 11% stake in Manipal.
India’s National Investment & Infrastructure Fund (NIIF), which invested INR 21bn in the company in 2021, is fully exiting its position. Manipal Education & Medical Group, the promoter entity controlled by Pai family, will retain 30%.
Founded in 1991 by Ramdas Pai, who remains chairman emeritus, Manipal Health controls Manipal Hospitals, one of India’s largest hospital chains. The company has 29 hospitals across 16 cities with over 8,300 beds. Its 4,000 doctors and 8,000 ancillary staff serve over 5m patients each year.
In 2021, Manipal Health added 11 hospitals to its portfolio with the acquisition of Columbia Pacific Management’s India hospital business for INR 18bn. Two years earlier, TPG and Malaysia’s Hong Leong Group agreed to buy Columbia’s Southeast Asia operation. Also in 2021, Manipal Health bought Vikram Hospital from Multiples Alternate Asset Management for INR 3.5bn.
In 2018, TPG and Manipal Health collaborated on a INR 32bn bid for Fortis Healthcare but lost out to IHH Healthcare.
“Since our investment in 2015, we have witnessed Manipal’s transformational journey of becoming one of the largest, best-managed and patient-centric healthcare networks in India,” said Puneet Bhatia, Asia co-managing partner at TPG, in a statement.
“By re-investing through our new Asia fund, TPG Asia VIII, we look forward to continuing to support Manipal’s mission of bridging the quality healthcare infrastructure gap in the country.”
Other sizeable recent investments in India’s hospital space include Ontario Teachers' Pension Plan (OTPP) taking a majority stake in Sahyadri Hospitals last August and setting up a partial exit for Everstone Group. Around the same time, KKR generated proceeds of INR 91.9bn by selling its remaining shares in Max Healthcare Institute.
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