MC Exclusive | Speciality hospital chain The Eye Foundation taps PE funds in maiden bid to raise $100 mn

A source said the deliberations involving Coimbatore-based Eye Foundation may be part of a pre-IPO round.

Headquartered in South India, speciality hospital chain The Eye Foundation is planning to raise capital for the first time and has initiated preliminary steps to sell a minority stake and induct a private equity investor, four persons in the know told Moneycontrol on condition of anonymity.

"There is a lot of investor interest in the single speciality space and as part of its debut attempt, The Eye Foundation is looking to raise around $100 million and tap a suitable private equity player," one of the persons above said.

A second person told Moneycontrol that the proposed transaction has attracted attention from multiple bulge-bracket funds. "The Eye Foundation is strong in terms of clinical quality and financial performance. It is one of the most profitable firms in the space," this person said.

According to a third person, investment bank Veda Corporate Advisors is acting as the advisor on the deal.

A fourth person also confirmed the deal details and added that the ongoing deliberations involving Coimbatore-headquartered Eye Foundation may be part of a pre-IPO round, without elaborating on any timelines for a potential listing.

Dr D Ramamurthy, chairman of The Eye Foundation Group of Hospitals, declined to comment in response to an email query from Moneycontrol on the firm's capital raise plans.

An email query to Veda Corporate Advisors too remained unanswered till the time of publishing this article.

According to its website, The Eye Foundation has a track record of nearly three decades, treating millions of patients in super speciality eye hospitals located in more than 21 cities in Tamil Nadu, Kerala and Karnataka.

"We were among the first to introduce laser eye surgery both in laser refractive surgery as well as laser cataract surgery, which has greatly enhanced the precision of cataract operations. Our hospitals also comply with the NABH standards," the website said. NABH is the national accreditation board for hospitals and healthcare providers.

Deal action in eye care segment: PE's lead the way

In May, homegrown private equity firm ChrysCapital invested up to $100 million in New Delhi-based Centre for Sight (CFS). It was a mix of primary issuance and secondary sale of shares to help CFS accelerate its expansion plans. The deal involved the sale of the entire stake held by Mahindra Holdings Limited, a wholly owned subsidiary of Mahindra & Mahindra Limited. KKR and TPG too had reportedly shown interest in the asset.

In August 2023, Dr Agarwal's Health Care raised around Rs 650 crore from TPG Growth and Temasek, within a year of raising Rs 1,050 crore from the duo in an earlier transaction. A month earlier, Dr GSK Velu-led Maxivision Eye Hospital bagged a Rs 1,300-crore investment from Quadria Capital.

General Atlantic and Kedaara Capital pumped Rs 1,500 crore into ASG Eye Hospital in July 2022. Later, in February 2023, the National Company Law Tribunal approved the resolution plan of ASG Hospitals to acquire Vasan Healthcare Pvt Ltd with a bid value of Rs 526 crore.