Omni Hospitals on the lookout to raise Rs 322 crore from PE funding

HYDERABAD: Omni Hospitals, started in 2010 with a 150 bed super specialty facility in Kothapet, Hyderabad is in talks with many private equity firms for the investment purpose. It is reported that Omni hospitals is planning to raise around 50 million dollars (Rs 322 crore) through PE funding.

In year 2013, Mumbai-based private equity investment advisory company, ASK Pravi Capital Advisors Private Limited, has invested Rs 60 crore in Hyderabad-based Omni Hospitals for a minority stake. Currently ASK Pravi Capital holds around 35% stake in Omni Hospitals.

Two persons who are aware of the talks told ET that the healthcare services firm, which is a part of INCOR group, is availing the financial advisory services of Spark Capital, which had so far helped 19 healthcare service providers raise $450 million.

ET has further reported, "Global consultancy giant KPMG has completed a vendor due diligence of Omni Hospitals and Spark Capital is providing those details to a dozen PE firms for due diligence. The Hyderabad firm hopes to sign term sheets with prospective investors in 6-8 weeks to complete the fund raising exercise by around September."

"The Omni Hospitals management is hoping for an enterprise valuation of around Rs 500 crore where it plans to divest around 40% (up to $50 million or Rs 322 crore), including an exit to ASK Pravi Capital and will deploy balance funds on expansion," said another person informed the daily. "The equity dilution may vary depending on the interest of the prospective investors on structuring of the funds infusion ­ a complete equity or a combination of quity and debt,"

When contacted to Omni Hospitals' managing director Surya Reddy Pulagam to confirmed the ongoing talks but he refused to say anything on the said matter. He said,"There are some dozen-odd PE firms and global investors that Spark Capital has approached with the details of vendor due diligence done by KPMG. Some of the investors include IFC, Advent International, Faring Capital, Aster DM Healthcare and Piramal group, among others."

OMNI Hospitals started in 2010 with a 150 bed super speciality hospital in Kothapet, Hyderabad. Since its inception, the hospital has setup over 20 specialities including Cardiology, Nephrology, Orthopedics and Pediatrics.

Omni Hospitals currently has six hospitals under its fold, which includes three in Hyderabad and one each at Visakhapatnam and Kurnool in Andhra Pradesh and one at Cuttack in Odisha with a cumulative capacity of 800 beds.