MC Exclusive | Promoters of Manipal Hospitals in talks to buy part stake from TPG; deal may value firm at Rs 18,000-Rs 20,000 crore

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The promoter group of IPO-bound multi-speciality healthcare provider and operator Manipal Hospitals, led by Dr Ranjan Pai, is in talks to raise funds and buy back part stake from existing investor TPG and give the private equity giant a partial exit, multiple industry sources in the know told Moneycontrol.

“The move is aimed at ensuring a good return for investors and will generate liquidity for them in the pre-listing phase. It reflects the strong relationship between both parties and the discussions are around buying a portion of TPG’s current 21.5 percent stake,” said one of the persons cited above.

A second person said the proposed transaction indicates the promoter groups’ belief in the business and growth potential of Manipal Hospitals.

“This is basically Ranjan Pai betting on his own firm as it gears up for an eventual listing. TPG has been an investor for six-seven years. It’s a win-win deal and based on current negotiations, Manipal Hospitals is likely to be valued between Rs 18,000 crores to Rs 20,000 crores,” the person added.

A third person told Moneycontrol that Barclays and Deutsche Bank are helping the promoter group of Manipal Hospitals with the proposed fund raise. He elaborated that the promoter group looking to hike stake would send a good signal to the stock market.

All the three persons cited above spoke to Moneycontrol on the condition of anonymity.

In response to email queries from Moneycontrol; TPG , Barclays and Deutsche Bank declined to comment . Moneycontrol has sent reminders and is awaiting responses from Manipal Hospitals and Deutsche Bank.

Bengaluru-based Manipal Hospitals which is targeting an IPO in the next two to three years is also backed by Singapore’s Temasek and quasi sovereign wealth fund National Investment and Infrastructure Fund (NIIF). Past reports have indicated the promoter group holds around 60 percent.

On March 31, 2021, Moneycontrol was the first to report govt backed NIIF’s interest in Manipal Hospitals.

The firm has been on a consolidation drive in the past few years. In November 2020, it acquired the Indian assets of Columbia Asia Hospitals for around Rs 2,100 crores and later in June 2021, it purchased Bengaluru based Vikram Hospitals from Multiple Private Equity for around Rs 350 crores.

The domestic hospital space has been buzzing with deal activity as the economy gradually recovers from the impact of COVID-19. Moneycontrol was the first to report that TPG backed Evercare was looking to exit Hyderabad-based Care Hospitals.

Later, Moneycontrol also broke the news of Barings PE Asia emerging as the front-runner to pick up a significant minority stake in AIG Hospitals.