Deal focus: Everstone revisits India’s hospitals

India’s private hospital industry is set for a boom, and Everstone Group wanted back in. The firm has been active in healthcare for years, but its hospital exposure ended in 2015 following its exit from Global Hospitals. With service delivery representing the largest share of a healthcare sector projected to be worth INR16 trillion ($230 billion) by 2020, there was a clear opportunity for an experienced investor to take advantage of the coming growth.

Maharashtra-based Sahyadri Hospitals gave the GP the re-entry opportunity it was looking for. Having acquired a majority stake for an undisclosed amount – providing an exit to investors including IDFC Alternatives – it plans to make Sahyadri the foundation for a nationwide healthcare delivery platform. 

“Western India, and Pune in particular, is under-supplied with respect to high-quality hospital infrastructure,” says Puncham Mukim, a managing director at Everstone. “Given Sahyadri’s brand in Western India and quaternary clinical care credentials we think it’s the right fit.”

Sahyadri’s track record was what first attracted Everstone: the company has been operating in Maharashtra for nearly 25 years and has gained a reputation as a trustworthy provider of care. Its eight hospitals offer treatment for a wide range of specialties, and its affordable prices mean it can cater to a broad slice of the population.

Everstone plans to help set the company on a path for further growth in Maharashtra. The firm has provided a fresh infusion of primary capital to help Sahyadri add more beds, and it will identify collaboration opportunities with other companies in its healthcare portfolio in India and Southeast Asia.

“There is obviously a lot of expertise that comes with being active healthcare investors,” says Mukim. “With our experience, we understand the principals of hospital care; some of our other investments are at the periphery of hospital operations, and we can find synergies wherever they are available, whether it’s in pharmaceuticals, devices, or other areas.”

Everstone does not have a timeline for the broader healthcare platform in mind. The firm will look for more assets like Sahyadri that can offer high-quality, affordable healthcare in underserved regions. 

Of particular interest are companies that can benefit from the National Health Protection Scheme (NHPS), the government’s national health insurance initiative launched last year. Sahyadri is already opening new capacity for the expected influx of patients, and other operators are expected to follow. 

“The NHPS is really going to change the game for a lot of players, because there is going to be a lot of demand from a segment of society that has so far gone untreated due to a lack of a robust payor framework,” Mukim says. “There will be more people going for diagnosis, and once they are diagnosed they have options for treatment, and Sahyadri has the right mix of assets to cater to multiple segments of the market.”   

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• Topics
• Healthcare
• South Asia
• Buyouts
• India
• Everstone Capital
• IDFC Private Equity