Mubadala is in talks to acquire a stake of less than 10% in India's Manipal Hospitals, in what could be the Abu Dhabi sovereign fund's first investment in the booming Indian healthcare space, people with direct knowledge said.
The fund is holding talks with Singapore's Temasek, which spent $2 billion in April to raise its stake in Manipal to 59% from 18% in the biggest hospital sector deal in India, said two of the three sources, who all sought anonymity as the talks are confidential.
The talks to acquire the small stake from Temasek are at the same April deal valuation of $5 billion, two of the sources said, which implies a value of up to $500 million for the Mubadala-Temasek stake deal.
Temasek said it does not comment on market speculation, while Mubadala declined to comment. Manipal did not respond to queries. Reuters is the first to report the talks.
The Singapore state investment firm's talks with Mubadala, which manages $276 billion globally, are at an early stage, said the first of the sources.
Temasek is keen to sell a small stake as it "wants to de-risk a little" and valuations are good, the second source said, explaining its rationale.
And Mubadala is "bullish on India (and) wants to double down on investments," the source added. "Healthcare is an attractive space with high margins."
Temasek intends to retain its majority stake in Manipal by continuing to be the largest and majority shareholder with a stake of more than 50%, said the third source.
The talks come as investor interest grows rapidly in India's healthcare market after the Covid-19 pandemic amid a surge in demand for services. India's private healthcare space, worth about $48 billion, is forecast by PwC to grow 12% to 14% a year.
Headquartered in the tech hub of Bengaluru, Manipal runs 29 multi-specialty hospitals, mainly in south India, and says it is the country's second biggest chain, focusing on areas such as cardiology, neurosurgery and cancer care.
An investment from Mubadala will also help Manipal if it wants to expand its business in the Middle East and needs "strategic advice", the second source said.
Mubadala has invested $4 billion in India, including investments in billionaire Mukesh Ambani's telecom and retail businesses, as well as Tata Power's renewable energy unit.
It considers India a "priority market" in Asia and Khaled Abdulla Al Qubaisi, its chief executive for real estate and infrastructure investments, told the Economic Times newspaper in May the fund was "really serious about deploying more in India".
Mubadala has also bet on healthcare elsewhere. In 2015, it brought renowned U.S-based medical centre Cleveland Clinic to Abu Dhabi, and in April this year combined its healthcare assets with Emirati intelligence firm G42 into a new company named M42.
