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India: Vikram Hospital PE stake up for sale


India: Vikram Hospital PE stake up for sale

A major stake amounting to a whopping Rs. 450 crore, owned by a private equity firm, Multiples Alternate Asset Management Pvt. Ltd in  Vikram Hospital (Bengaluru) Pvt Ltd, is up for sale. The PE is owned by Renuka Ramnath. Ever since the decision to sell has been taken, the PE company has been  talking to prospective buyers about the sale. According to sources known to them, they have been trying to increase efficiencies of the hospital to gain maximum profits from its stake sale.

However, Renuka Ramnath has maintained a discreet silence on the issue, by not replying to the mail sent to her for confirmation of the understood sale, being underway. Moelis and co, has been directed by the Equity firm to work out the entire sales process for them. The work supposedly has been assigned to Moelis, after it successfully closed a deal for Advent International’s stake in a Hyderabad based Hospital Chain, Care India Ltd, to a  Dubai based company Abraaj, claims one of the two sources.

The fund which was purchased in 2013, was worth Rs.180-190 crores and came along with the 64 % ICICI Venture Fund Management Incorporation Ltd stake. Moelis refused to  give out any information in this regard reports Dalal Street Asia.

“Multiples is in the process of exiting three-four investments during this year from its maiden fund and this is one of the first this year where the formal process has begun,” said the second source, mentioned above.

Vikram Hospital, a healthcare service provider with primary specialities in cardiac sciences, neurosciences, bariatric and metabolic surgery, nephrology and urology , is a 225 bed hospital.

With a revenue rise in 2014-15 from Rs. 81.4 crore to 97.50 crore, the hospital also reflected a loss of 15.60 crore in 2014-15. The Registrar of companies (RoC), has yet to release the financials of the latest year.

Multiple’s success story with Vikram Hospital in terms of asset management has given the PE firm  confidence to consider afflicted segments for investments. Though Vikram was a small investment,  it gave Multiples tremendous confidence in their ability to turn the clock around, the source opined.

The healthcare industry is ripe in terms of buying and selling of stakes at present. Investors are feeling attracted to deal activities in this space. Many hospitals are into considering public bids.

The healthcare bazaar is buzzing with upcoming sales of many a large chain of hospitals. Some of the prominent ones being: IDFC Alternatives Ltd-backed Sahyadri Hospitals Ltd, the largest chain of multi-specialty hospitals in Maharashtra, and Ascent Capital Pvt. Ltd and Orbi Med Advisors LLC-backed Kerala Institute of Medical Sciences (KIMS), the hospital chain with a presence in India and West Asia.

According to Abhishek P. Singh, Director, Healthcare, PricewaterhouseCoopers India Pvt. Ltd. a lot of international and national business players are  looking around for buys in India.  “There are less quality assets than the demand for them. There is a good momentum in the secondary market as well with some large quality assets going that route,” he adds. The healthcare space has four or five such deals taking the rounds with more to follow according to the Director. Multiples is closing its first round of the maiden transaction by putting up the stake in Vikram, for sale.

The PR firm is known to have made 11 investments from its first fund worth $405 million, raised in 2010. The equity firm sold of 10% of its stake in  e-commerce logistics firm, SSN Logistics Pvt. Ltd to Tiger Global Management LIc,  as part of an attempt to return capital to its limited partners(LPs).

The other investments rounded of by multiples include : South Indian Bank Ltd, PVR cinemas. In its second fund the PE firm has raised 651.5 million  which has been launched in a housing finance enterprise, with equity capital infusion of Rs.100 crore. With Canada Pension Plan Investment Board considered by it as one of its large LPs



Source: with inputs
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