Nearly six years after its investment in Paras Healthcare, Malaysian private equity firm Creador has revived its plans to exit the leading North India-based hospital chain, multiple industry sources with knowledge of the matter told Moneycontrol.
"Creador is in exit mode and wants to sell its minority stake in Paras Healthcare. They have recently appointed investment bank o3 Capital for the proposed transaction," said one of the persons above.
In July 2017, Creador, which focuses on investments in South and South East Asia, invested Rs 275 crore in Paras Healthcare. Reports pegged the quantum of stake acquired by Creador at around 22 percent. The fund raise was aimed at expanding into new locations in North India as well as expansion of existing facilities.
"With Creador's support, we aim to make our vision of envisaging a healthcare revolution in North India a reality," Dharminder Nagar, MD & CEO of Paras Healthcare had said as part of the fund raise announcement.
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A second person told Moneycontrol that Creador had attempted a stake sale earlier but talks did not proceed then and hence the PE fund was looking at exploring a fresh launch of the deal.
To be sure, a July 13, 2022 report by Deal Street Asia said the hospital operator had initiated talks with a host of private equity firms and strategic investors as it looked to raise funding and pave the way for the exit of Creador at an enterprise value of over Rs 3,000 crore.
" Teasers to potential suitors are likely to be sent soon. The deal should elicit healthy interest as Paras Healthcare is present in a vibrant, growing market in the Hindi speaking belt in North which does not have too many pan-India peers," the second person said.
"Paras Healthcare has done well and this planned stake sale by investor Creador should get interest from private equity funds. It will be interesting to see how the valuations play out as the environment has changed as compared to six months back," a third person told Moneycontrol.
All the three persons above spoke to Moneycontrol on the condition of anonymity.
Moneycontrol is awaiting an email response from Creador, Paras Healthcare and o3 Capital and has sent reminders. This article will be updated as soon as we hear from the parties.
A closer look at Paras Healthcare
According to its website, Paras Healthcare has a network of six multi-super specialty hospitals in Northern India that operate 1,500 beds as of date. The chain started with its first hospital in Gurugram in 2006, expanded to Patna, Darbhanga, Udaipur, Panchkula, Ranchi, and later extended to Srinagar & Kanpur.
"Paras Health aspires to be the largest private healthcare provider in North India by 2031 with 9,000+ beds under its network. Of this, around 5,000 beds will be added by FY 2028 through organic and inorganic expansion. The committed expansion pipeline of 2,000 + beds will be met through expansion at Kanpur, Srinagar, and Panchkula," the website adds.
"Paras Health’s mission is to make affordable and quality tertiary health accessible to communities that lack such services," the website says further.
The Creador strategy
According to its website, Creador’s current portfolio includes some of the fastest-growing brands in Asia, in the retail, F&B, manufacturing, financial services, tech and healthcare industries. Other than Malaysia and India, the firm is present in Singapore, Thailand, Vietnam, the Philippines, Indonesia and also in Spain.
Since its inception in 2011, Creador has launched five funds which have attracted investors and partners, ranging from international fund managers, private pension funds, other private equity firms, government-linked bodies, to private wealth managers and individuals. It last raised $700 million when it launched Creador V in 2021, its website says.
In India, Creador has invested in firms such as Sapphire Foods, Ujjivan Financial Services, Paras Healthcare, retail NBFC Kogta Financial, drug maker Corona Remedies (stake sold to ChrysCapital), packaging firm Shriji Polymers, healthcare equipment maker Accumax Lab and others.