Aster DM Healthcare Limited, one of the largest integrated healthcare providers in India and GCC has today announced the completion of the separation of its India and GCC businesses. Under the separation plan, a consortium of investors led by Fajr Capital, a sovereign-backed private equity firm, has acquired a 65% stake in Aster GCC, with the Moopen family retaining a 35% stake alongside management and operational rights. In the Indian operations, the Moopen family continues to hold the 41.88% stake. The transaction has now concluded and pursuant to which Affinity Holdings Limited (a wholly subsidiary of the Company) has received a cash consideration of USD 907.6M.
In November 2023, the Company obtained board approvals to separate its GCC and India businesses to establish two distinct regional healthcare champions that will benefit from the strategic and financial flexibility to meet the priorities of patients and focus on the growing demand in their respective markets. The separation plan was also approved by the Company’s shareholders in January 2024. The transaction was subject to customary regulatory approvals, contractual approvals and closing conditions, all of which have been satisfied and concluded.
The Company plans to add 1700 beds by FY27 through the organic route and will further look for expansion through the inorganic route as well to be among the top 3 hospital chains in India. The expansion plan will encompass a mix of brownfield and greenfield projects, encompassing the upcoming Aster Capital in Trivandrum, and Aster MIMS Kasargod and adding bed capacity to the existing hospitals. The Company will also be looking at potential markets such as Maharashtra and Uttar Pradesh. The capital allocation for this expansion is in the range of 1000cr.
The Company as communicated earlier intends to consider distributing 70-80 percent of the transaction proceeds as dividends to its shareholders in the range of ₹110 to ₹120 per share and anticipates distributing the dividend, post obtaining required approvals.
Dr. Azad Moopen will remain the Founder Chairman and while Ms. Alisha Moopen will remain a director on the board of the Company, she will also serve as the Managing Director and Group CEO of Aster GCC. The Indian entity will be led by Dr. Nitish Shetty as Chief Executive Officer, who will focus on the growth of the India business, aimed at creating value for its shareholders.
Dr. Azad Moopen, Founder Chairman, Aster DM Healthcare said, “The rationale behind taking the bold and strategic decision to separate the India and GCC entities was to establish fair value to both entities and to unlock long-term investor value. The current Indian healthcare market looks promising and post segregation, our efforts will be to dynamically increase our footprint in India. Through both greenfield and brownfield opportunities, we aim to take our total bed tally in India to 6600+ in the coming 3 years and scale up our labs and pharmacy business to emerge as the top 3 integrated healthcare providers in India.”
Ms. Alisha Moopen, Managing Director and Group CEO, Aster GCC business said, “The transaction is one of the major turning points in the history of Aster and we are excited to embark on the next stage of the growth journey. Both geographies are uniquely positioned and thus have a huge growth potential and would be looking at strengthening our presence in both regions through various healthcare offerings. Aster remains committed to supporting each other that will help us become one the top healthcare brands in the world.”
Dr. Nitish Shetty, CEO, Aster DM Healthcare, India said, “The Indian healthcare market with a population of 1.4 billion to serve, is poised for rapid and sustainable growth in the next few years. With the finalization of the transaction and the proceeds available for Indian expansion, we have already chartered out our plans for expansion for the next 3 years. While we are focused on expanding our footprint in the South, we are open to venture into newer geographies depending upon their potential.”
EY and PwC provided independent valuation advice and ICICI Securities provided fairness opinion for the valuation guidance for the Company. Moelis & Company and Credit Suisse acted as the sell-side advisors. Baker & McKenzie LLP was the sell-side’s legal advisors, while Cyril Amarchand Mangaldas was Aster’s lawyer on the transaction. AZB & Partners were the advisors to independent directors. HSBC Bank Middle East Ltd., Allen & Overy LLP and PwC acted on behalf of the Fajr Capital consortium.
