Blue Sapphire Healthcare Pvt. Ltd, which operates super-specialty hospital Asian Institute of Medical Sciences in Faridabad, has raised $21 million (Rs 139 crore) from UK’s development finance institution CDC Group Plc in a fresh round of funding.
Existing investor Orbimed, which had invested Rs 100 crore in Asian Institute of Medical Sciences in 2014, will continue to hold its stake post the transaction, the company said in a statement.
VCCircle had reported in 2016 that Asian Institute of Medical Sciences had hired investment bank Veda Corp to raise fresh funds as it had deployed the entire funds received from Orbimed.
CDC's investment will help Asian Institute of Medical Sciences' five-year expansion into tier II and III cities in Jharkhand, Bihar and Uttar Pradesh. The company will add up to 1,000 beds through its existing facilities in Moradabad and Dhanbad and in new facilities in Haryana, Bihar and Jharkhand, it said.
Asian Institute of Medical Sciences, which was founded in 2010, currently runs 750 beds across three tertiary care hospitals at Faridabad (Haryana), Moradabad (Uttar Pradesh) and Dhanbad (Jharkhand)), and two secondary care hospitals in Yamuna Vihar (Delhi) and Sambhal (Uttar Pradesh). It also has three health clinics in Haryana and New Delhi.
"Our investment in Asian will increase access to high-quality care in poorer and under-served cities in Northern and Central India," said Srini Nagarajan, managing director and dead of South Asia, CDC.
PE firms’ bets on regional hospitals
Regional hospitals have found favour with private equity investors over the past few years.
According to a report by audit and consulting firm PricewaterhouseCoopers, India requires 6-7 lakh additional beds over the next five to six years. This indicates an investment opportunity of $25-30 billion.
In a major private equity transaction last year, homegrown private equity firm True North said it would invest $200 million (Rs 1,298 crore) in hospital chain Kerala Institute of Medical Sciences in a primary and secondary transaction that would see Ascent Capital Advisors India Pvt. Ltd and OrbiMed Advisors LLC exit the company.
Besides, regional players Paras Healthcare and Regency Healthcare raised their maiden private equity funding last year.
In 2016, Dubai-based private equity investor Abraaj Group had agreed to acquire a majority stake in Quality Care India-run Hyderabad-based multi-specialty hospital chain CARE Hospitals in a secondary transaction from PE firm Advent International. The deal was struck at an enterprise value of about $270 million.
CDC's healthcare bets in India
CDC has been actively investing in India's healthcare space. Earlier in 2013, it invested in Hyderabad-based Rainbow Hospitals, which primarily focuses on paediatric and maternal care. Subsequently in 2015, it invested in another hospital chain Narayana Health, which went on to float an initial public offering (IPO) in 2016.
Last year, CDC tied up with Manipal Education and Medical Group (Manipal Group), a privately held conglomerate focused on education, healthcare and research, to float a Rs 500 crore (around $75 million) healthcare fund.
The fund has since gone on to invest in specialised diagnostics firm iGenetic Diagnostics and home healthcare provider Portea.