Separately, Temasek and KKR are additionally in preliminary talks to purchase part of the promoter group stake from Pai, the 2 folks stated, requesting anonymity. To make certain, Pai could proceed to carry a majority stake within the firm, they added.

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Bengaluru-based funding financial institution Allegro Capital is advising Manipal on the stake sale.

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“KKR has had nice success within the healthcare sector, making enormous returns on the Max Healthcare funding, and thus they’re very eager on deploying massive sums of capital within the healthcare sector and have been pursuing this funding in Manipal aggressively,” one of the two people cited above said.

KKR sold its remaining 27.5% stake in Max Healthcare for around ₹9,200 crore in August in a deal that marked the investor’s biggest exit from an Indian investment, as well as the biggest private equity exit through a block trade on the Indian stock markets.

Investor interest in healthcare companies soared after hospital operators swiftly bounced from the losses during the pandemic when patients deferred non-emergency care. Patients are, however, returning to hospitals for elective surgeries and other treatments after putting them off for nearly two years for fear of contracting covid.

“As of now, it’s only TPG and NIIF stake sale that investors are looking at,” stated Manipal Health promoter Ranjan Pai in a textual content response to Mint’s queries. “Not planning to step again from any of my firms,” Pai added.

Spokespeople for KKR, TPG and Temasek declined to comment. Emails sent to a spokesperson for NIIF did not elicit a response.

The Pai-led promoter group owns 50.4% stake in Manipal Health, with TPG owning 21.52%. Temasek owns 18.13%, and India’s quasi-sovereign wealth fund NIIF holds 8.45%. As of 30 June, Manipal Health operated 23 hospitals, with 14 in the south across Bengaluru, Mangaluru, Mysuru, Vijayawada, and Salem; six in the north across Delhi, Jaipur, Ghaziabad, and Patiala; two in Pune and one in Kolkata.

“The investors have shown an interest in picking up a part of the promoter stake in the company. Those talks are still at a preliminary stage, and there is a chance that a promoter stake sale may not happen along with the investor (TPG, NIIF) stake sale but may happen at a later date,” the second particular person stated.

Manipal Health’s income greater than doubled to ₹4,010.6 crore within the 12 months ended 31 March from ₹1,813.3 crore within the earlier 12 months, which was extra severely impacted by the pandemic-related lockdowns, in accordance with an 18 August report by score company IndiaScores. The hospital chain’s working revenue practically tripled to ₹977.1 crore in FY22 from ₹330.2 crore within the earlier 12 months, the IndiaScores report added.

“During FY22, Manipal Health’s administration undertook robust efforts to bolster profitability, using numerous measures similar to enhancing working efficiencies, prices optimization, discount in company overheads, elimination of duplication headcounts, enchancment in processes, and enhancements within the medical gear within the newly acquired models of Manipal Hospitals Pvt. Ltd (previously Columbia Asia Hospitals) and Manipal Hospitals (Bengaluru) Pvt. Ltd. Furthermore, the Dwarka hospital, which had been incurring losses till FY21, noticed a turnaround in FY22, thereby making all of Manipal Health’s models worthwhile,” IndiaRatings said.

In the June quarter, Manipal Health recorded a revenue of ₹1,099.8 crore and an operating profit of ₹277.4 crore, with occupancy levels at 64%.

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