Manipal Health may launch IPO after deal to buy AMRI Hospitals

Manipal Health is India's second-largest hospital chain, is estimated to have 8,700 hospital beds

Bangalore-based Manipal Health Enterprises, which is valued at about Rs 35,000 crore, may go for an initial public offering (IPO) after it closes a deal to acquire Emami Group’s AMRI Hospitals, said sources in the know.

The deal to acquire AMRI Hospitals from the Emami Group at an enterprise value of Rs 1,500 crore is likely to be closed soon. “A binding agreement has been signed between the two parties, and AMRI Hospitals are basically now working on the conditions precedent before the deal can be closed. It is likely to happen next month,” said a source close to the developments.

A condition precedent is a term that must be satisfied by a party to a transaction, failing which the other side is not bound to close it.

Manipal Health, which is India’s second-largest hospital chain after Apollo Hospitals, has been considering an IPO for some time now. Manipal acquired the Columbia Asia hospital chain in November 2020 for Rs 2,100 crore. In June 2021, it bought Vikram Hospitals in Bangalore from Multiples Private Equity for Rs 350 crore.

Manipal Health is estimated to have 8,700 hospital beds across 28 locations after the acquisitions. The privately held entity is backed by investors and private equity (PE) players Temasek Holdings, TPG Capital, and National Infrastructure Investment Fund (NIIF), apart from the Pai family.

The Pai family holds around 52 per cent in Manipal Health. Private equity company KKR is reportedly looking to acquire the stakes from Temasek, TPG, NIIF and the Pai family.

Ranjan Pai, chairman of the Manipal Medical Education and Medical Group (MEMG), did not wish to comment on the developments.

Sources, however, said that some PEs, like Temasek, may not have made up their mind for selling their stake at this point. The IPO could offer an exit for the existing investors.

Another source close to the development said, “It’s up to the Pai family to decide if they want to offload stakes to another PE investor, or go for an IPO. Both the options remain open, but it all boils down to the valuation one can fetch.”

On acquisition spree

• The deal to acquire AMRI Hospitals by Manipal Health is valued at Rs 1,500 crore and is likely to be closed soon
• The firm had acquired the Columbia Asia hospital chain in November 2020 for Rs 2,100 crore
• In June 2021, the group had bought Vikram Hospitals in Bengaluru from Multiples Private Equity for Rs 350 crore