Top healthcare investors Orbimed, CDC Group look to exit Asian Institute of Medical Sciences

Representative image.

Healthcare focused US private equity fund Orbimed and UK’s development finance institution CDC Group Plc are looking to exit north India-focussed super speciality hospital chain Asian Institute of Medical Sciences (AIMS), which is operated by Blue Sapphire Healthcare Private Ltd., multiple industry sources with knowledge of the matter told Moneycontrol.

“Both these investors are eyeing an exit and a significant minority stake will be on the block as part of the proposed transaction,” said one of the persons above.

Orbimed and CDC together hold roughly around 47-48 percent stake in the hospital chain. The remaining stake is held by the promoter group led by founder Dr Narendra Kumar Pandey.

A second person said that if the promoter group also chooses to sell stake, then the potential divestment of a controlling stake is also likely to be on the table and that a final call would be taken based on valuations.

“As of now, the plan is to launch the deal in May. In case a majority stake is up for grabs, then a strategic player operating in the south or the west may be interested in exploring this deal as the assets are north-based. As compared to other regions, it’s not often that an asset in the North comes to the market,” a third person told Moneycontrol.

A fourth person also confirmed the exit plans of the two investors and added that it was challenging to operate in the markets in which AIMS operates.

A fifth person familiar with the AIMS hospital chain said, “The team has been able to crack a tough market in terms of doctor engagement and pricing and has got the model right.  Branding and returns are also decent.”

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

Email queries (along with multiple reminders) sent to AIMS and Orbimed remained unanswered at the time of publishing this story. When contacted, the CDC Group “declined to comment on market speculation.”

To be sure, AIMS has presence in Delhi/NCR, UP, Jharkhand and Bihar and has a total bed count of around 1,300. The key branch is located at Faridabad and has more than 420 beds.

According to its LinkedIn page, the hospital chain offers state-of-the-art facilities in Cardiology, Oncology, Orthopedics, General Surgery, Nephrology, Endocrinology, Gastroenterology, General Medicine, Gynaecology, Pediatrics, Laboratory Medicine, Neurology, Ophthalmology, Radiology, Respiratory Medicine, Urology, among other specialities.

According to reports, in 2014, Orbimed invested around Rs 100 crore in AIMS. Four years later, CDC Group Plc pumped in around Rs 140 crore in a fresh round of funding.

According to AIMS website, it offers more than 24 speciality services across 10 locations and has 1,100 plus doctors and 4,500 plus trained staff.

Both Orbimed and CDC Group have an extensive healthcare portfolio in India. The former’s group includes the likes of Netmeds, Marksans Pharma, IV manufacturer Eurolife Healthcare, East India-based Suraksha Diagnostics and Laxmi Dental (dental lab equipment maker).

On the other hand, CDC Group has bet on firms such as Dr Agarwal’s Health Care, Sequent Scientific, Vikram Hospitals, Shilpa Medicare, Super Religare Labs and Krsnaa Diagnostics.

The domestic hospital and healthcare space has been buzzing with deal activity as the economy gradually recovers from the impact of Covid-19.

“Given generics going through a downturn, money is flowing towards domestic consumption which means capital within is moving towards domestic branded formulations, health tech diagnostics and hospital services. This has resulted in improved valuations for these sectors. Hence, funds which were sitting on hospital investments in last five years are seeing a window to exit,” says Nitin Lath, Managing Director at Torreya India.

A senior industry executive concurred and said attractive multiples were leading to PE and promoter exits.

Another expert who closely tracks the healthcare segment added, “Covid – 19 is the primary factor which delayed capex and the investment cycle. Also, performance was all over the place with too many swings which is now stabilizing, allowing accounting DD to make sense.” He spoke on the condition of anonymity.

On March 15, Moneycontrol had reported that nearly three years after acquiring a controlling stake in Pune-based Sahyadri Hospitals, private equity firm Everstone Group had revived plans to exit the firm, which is the largest hospital chain in Maharashtra.

On the same day, Moneycontrol reported that the promoters of Manipal Hospitals were in talks to buy part stake from existing investor TPG ahead of an eventual IPO.

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

Back in January, Moneycontrol was also the first to report that TPG- backed Evercare was looking to exit Hyderabad based Care Hospitals.

In June 2021, Manipal Hospitals acquired Bengaluru-based Vikram Hospitals for Rs 350 crore. Later in the year, Temasek platform Sheares Healthcare acquired Kolkata’s Medica Synergie, a multi-speciality hospital.