Aster DM and Blackstone-backed Quality Care to merge, create one of India's largest hospital chains

Aster DM announces merger with Blackstone-owned CARE Hospitals

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26 Aug, 2025 12:21

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Aster DM Healthcare Ltd on November 29 announced merger with Blackstone-backed CARE Hospitals, creating one of India’s top three hospital chains.

In a stock exchange filing, Aster DM said it will acquire 1.9 crore shares of Quality Care India Ltd (CARE Hospitals) from Blackstone and Centella at Rs 445.8 apiece by issuing 1.86 crore of its own shares to Quality Care's shareholders at Rs 456.33 per share.

The company will also move its registered office from Karnataka to Telangana. On November 29, Aster DM's shares on BSE rose 2.3% to Rs 500.55.

"The merger is expected to result in significant strengths including scale, diversification, enhanced financial metrics, synergies, increased growth potential, and backing of marquee PE investors. The transaction values Aster at 36.6x FY24 adjusted post INDAS EV/ EBITDA, which is
45% higher than the multiple ascribed to QCIL i.e. 25.2x FY24 adjusted post INDAS EV/ EBITDA. Based on the agreed swap ratio, Aster shareholders will hold 57.3% and QCIL shareholders will hold 42.7% in the Merged Entity," Aster DM said in a stock exchange filing.

In September, Moneycontrol reported that Blackstone-owned Care Hospitals is in advanced talks for a so-called reverse merger with Aster DM Healthcare.

"Aster DM Quality Care Limited will have a combined portfolio of four leading brands: Aster DM, CARE Hospitals, KIMSHEALTH and Evercare. The combined entity will have a of network of 38 hospitals and 10,150+ beds spread across 27 cities making it one of the top 3 hospital chains in India," said Aster DM.

The merged entity will be jointly controlled by Aster promoters and Blackstone, holding 24% and 30.7% ownership. respectively. Azad Moopen will continue in his role as the Executive Chairman and will oversee the merged entity. Varun Khanna, Group MD of Quality Care, will be the MD and Group CEO of the merged entity, said Aster DM.

The merged entity plans to add another 3,500 beds by fiscal year 2027, funded through internal accruals.

Founded in 1987 by Chairman Azad Moopen from a single clinic in Dubai, Aster has since expanded in the Gulf region and India, operating dozens of hospitals as well as hundreds of clinics and pharmacies. Earlier this year, the company separated its business in the Gulf from the India business.

Azad Moopen, Founder and Chairman of Aster DM Healthcare, said: “The new combined entity ‘Aster DM Quality Care Ltd.’ is poised to become one of the largest healthcare players in the industry, setting new benchmarks in patient-centric care, innovation, and accessibility. By combining the strengths of two pioneers, we are not only expanding our footprint but also creating a transformative force capable of reshaping the healthcare landscape. The integration of Aster and Quality Care’s extensive network and deep operational expertise with backing from Blackstone and TPG – among the most respected private equity firms will enhance our ability to deliver world-class healthcare services, drive innovation, and improve patient outcomes. The merger will also provide our medical professionals with an opportunity to cater to higher and diverse patient inflows.”

Amit Dixit, Head of Asia for Blackstone Private Equity, said: “We are committed to creating one of India’s leading platforms in the healthcare sector. It is in our DNA to be a builder of businesses – using our scale, operational expertise, and global life sciences insights, we will help grow the platform, expand its footprint, and develop it into a world-class healthcare institution. We are excited to partner with the Moopen family which shares our values and strong governance standards. We believe Varun Khanna is a terrific leader and can help build the combined entity.”

Moelis & Company and Advay Capital acted as financial advisors, with Kotak Investment Banking as corporate advisor and Cyril Amarchand Mangaldas as legal counsel to Aster. Blackstone and TPG, on behalf of QCIL, were advised by NovaaOne Capital as their financial advisor with Trilegal and JSA acting as legal counsel. PwC recommended the swap ratio as an independent registered valuer and ICICI Securities provided the fairness opinion on the swap ratio.