Paras raises $42 mn from Creador in debut PE round

By Joseph Rai

  • 17 Jul 2017

Paras Healthcare Pvt. Ltd, which runs a chain of hospitals in North India under the Paras Hospitals brand, has raised $42 million (Rs 275 crore) from South- and Southeast-Asia-focused private equity firm Creador Advisors India Pvt. Ltd.

Dharminder Nagar, promoter and managing director, Paras Healthcare confirmed the development to VCCircle. “We intend to use the funds for new projects and expand existing facilities. We are planning to add 1,000 beds over the next three to four years. North India has 60% of India’s population, but only 40% of the healthcare provisions. I see a clear opportunity and need in the region.”

Dharminder Nagar, Managing Director, Paras Healthcare
“Paras provides affordable, accessible and quality heathcare in Tier II and III towns in North India. These geographies have poor penetration of organised and high-quality healthcare. Creador is encouraged by Dr Dharminder’s vision and Paras’s operating performance at its hospitals. An aggressive expansion plan has also been put in place and is aimed at creating shareholder value in the medium term," said Anand Narayan, managing director, Creador Advisors.

“Acquisitions could be part of the NCR story. We may add one or two hospitals. Outside NCR I do not see assets that could be acquired immediately to fit the bill for Paras,” Nagar added.

VCCircle had first reported that Creador was set to invest in Paras. This is Creador’s second investment in the Indian healthcare sector.

The private equity firm had earlier backed Ahmedabad-based pharmaceutical company Corona Remedies Pvt. Ltd.

Paras Healthcare, which was founded in 2006, had revived its plans to raise capital from private equity firms in November 2016 and had mandated financial advisory firm Avendus Capital to run the fundraising process.

Paras Hospitals offers 730 beds across Delhi-NCR, Bihar, Chandigarh and Panchkula . The company was also in the process of setting up a 50-bed mother-and-child care unit in Noida, and a 220-bed unit in Panchkula.

Regional hospitals, which compete with the likes of larger chains such as Apollo, Fortis and Max, have found favour with private equity investors over the past few years.

According to a report by audit and consulting firm PricewaterhouseCoopers, India requires 600,000-700,000 additional beds over the next five to six years, indicating an investment opportunity of $25-30 billion.

At least two big deals were sealed in the regional hospital segment over the past year.

In March, homegrown private equity firm True North Managers LLP said it would invest $200 million in Kerala Institute of Medical Sciences.

Last year, Dubai-based private equity investor Abraaj Group had agreed to acquire a majority stake in Quality Care India Ltd-run Hyderabad-based multi-speciality hospital chain CARE Hospitals in a secondary transaction from PE firm Advent International. The deals was struck at an enterprise value of about $270 million.