Baring PE Asia emerges as front-runner for stake buy in Hyderabad’s AIG Hospitals

Representative image.

One of the largest private equity firms in Asia, Baring Private Equity Asia, has emerged as the front-runner to pick up a significant minority stake in India’s leading gastroenterology hospital, Hyderabad-based AIG (Asian Institute of Gastroenterology) Hospitals, multiple sources in the know told Moneycontrol.

If the deal fructifies, it will arguably represent the debut healthcare investment in India by the Hong Kong-headquartered private equity firm, which has had a scorching run in the country in the past few years, sealing multiple big-bang deals in the tech and BPO segments.

“Baring PE Asia (BPEA) has edged ahead of TPG in the final leg for buying a substantial minority stake in AIG Hospitals. They have entered exclusive negotiations and are the front-runners at this stage,” said one of the persons cited above.

Two other persons confirmed the same, adding that existing investor private equity firm Quadria Capital which holds a 30 percent stake in AIG Hospitals would exit the company as part of the proposed deal.

Investment bank Goldman Sachs is advising on the sale process and if talks conclude, BPEA may end up holding a total stake of around 40 percent in AIG Hospitals as part of the negotiations along with governance rights, the first of the two persons above added. It was immediately unclear if there were any plans to hike the stake beyond 40 percent going ahead.

“BPEA has been aggressive and successful in the IT space in India. They have been keen on the healthcare segment for a while now and this would possibly be their first play in India. TPG is out of the race,” a fourth person elaborated.

All the four persons cited above spoke to Moneycontrol on condition of anonymity. Moneycontrol could not independently verify the deal valuations.

In response to an email query from Moneycontrol, Baring PE Asia declined to comment. Moneycontrol is awaiting an email response from Quadria Capital, AIG Hospitals and Goldman Sachs and will update this article as soon as we hear from these firms.

In 2021, BPEA sold software firm Hexaware Technologies to rival PE firm Carlyle in a mega deal worth around $3 billion. In the same year, it acquired tech-driven content and data solutions firm Straive from Swiss private equity firm Partners Group for around $1 billion. Then BPEA edged out stiff competition in another big transaction to purchase the healthcare services vertical of Hinduja Global Solutions, the BPO arm of the Hinduja group for $1.2 billion.

Additionally, on January 28, Moneycontrol was the first to report that Barings PE Asia was in the shortlist of suitors for the sale process of InterGlobe Technologies (now IGT Solutions), owned by private equity major Apollo Global Management.

THE AIG INVESTOR STORY

After its initial investment in AIG in 2015, in 2019, Quadria Capita acquired an additional 14 percent stake from investor Samara Capital in a deal worth around Rs 300 crore, taking its total shareholding to 30 percent.

Quadria Capital is an independent healthcare-focused private equity firm that specialises in growth capital investments in small cap and middle-market companies within the healthcare sector across South and Southeast Asia. It has assets under management exceeding $2.5 billion and investments across 21 companies in the Asia-Pacific region.

According to the private equity firm’s website, its India portfolio includes KIMS (Krishna Institute of Medical Sciences), Healthcare Global Enterprises, Concord Biotech, Strand Lifesciences, Healthcare At Home India and others.

MORE ABOUT AIG

AIG, Hyderabad was set up in 1986 and is headed by Dr D Nageshwar Reddy. It has an 800-bed super-speciality hospital at Gachibowli and another 300-bed hospital in Somajiguda.

According to its website, it was established as a new concept of day care unit where major endoscopic surgical procedures could be done on an outpatient basis without resorting to hospitalisation. Since then the institute has become one of the largest referral centres in Asia for therapeutic endoscopy and has the credit of doing the largest number of ERCP procedures (to treat problems in the liver, gallbladder, bile ducts and pancreas) in the world.

In addition to routine gastrointestinal procedures like endoscopy and colonoscopy, the website says the institute is one of the few centres in the country providing services like endoscopic ultra-sonography, endoscopic sewing, capsule endoscopy and E S W L (Extra corporeal Shock Wave Lithotripsy)