Manipal Hospitals to sell minority stake to NIIF for Rs 2,100 crore

Billionaire entrepreneur Ranjan Pai-controlled Manipal Hospitals is in final stage talks to sell a minority stake in the company to government anchored National Investment and Infrastructure Fund (NIIF) for Rs 2,100 crore and the deal is likely to be closed soon, said sources close to the development.

The amount raised would be partly used to fund the company’s acquisition of Columbia Asia Hospitals’ India business and partly to finance some of the other acquisitions that Manipal Health Enterprises is exploring in the near future, added the sources.

This will be a secondary stake sale in which Pai would be divesting a part of his 60 per cent stake in the company. Other investors in the PE-backed enterprise include TPG Capital and Temasek. One of the largest PE players, TPG had invested in Manipal around 4 years ago and roughly holds 22 per cent, while Temasek, which invested 2 years back, holds around 18 per cent.

NIIF has a Strategic Opportunities Fund which invests in sectors which are relevant strategically to India such as healthcare. “As Manipal Hospitals is a growing organisation, this stake sale will provide long-term capital to them as sovereign funds like NIIF tend to stay longer with the company,” said a person familiar with the matter. NIIF manages over $4.4 billion of equity capital commitments across its three funds namely Master Fund, Fund of Funds and Strategic Opportunities Fund, and is backed by LPs such as Abu Dhabi Investment Authority and Singapore’s Temasek.

Bengaluru-based hospital chain Manipal Hospitals had entered into a definitive agreement to acquire Columbia Asia Hospitals for Rs 2,100 crore last year. The deal is likely to be completed soon. Together, the combined entity will have a presence of 27 hospitals across 15 cities with over 7,300 beds and over 4,000 doctors and 10,000 employees.

The company had earlier said that it is looking at opportunities in east and west India to enhance its coverage and is also planning a greenfield 250-bed hospital in north Bengaluru in the next 2-2.5 years.

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