Manipal Health Enterprises nears Rs 1,400 crore deal to acquire Medica

Temasek-backed Manipal Health Enterprises is set to become India’s largest hospital chain with over 10,700 beds, as it nears the acquisition of Medica Synergie Private Ltd for around Rs 1,400 crore, sources close to the development said. An official announcement of the deal is expected later this month.

Apollo Hospitals Ente­rprise Ltd is the largest hospital chain with 10,103 beds. Manipal Health Enterprises (Manipal Hospitals) currently operates 9,500 beds across 33 hospitals in India. Medica has a presence in eastern India with 1,200 beds.
 

A source close to the development told Business Standard on the condition of anonymity that Manipal Hospitals would soon acquire the entire 87 per cent that Singapore-based Temasek holds in Medica. “Both hospital chains are backed by Temasek — it owns around 52 per cent of Manipal Hospitals and around 87 per cent of Medica,” the source said.
 

Merging the two was also an option, but that would have raised Temasek’s holding in Manipal Healthcare, which has other investors like TPG and the Ranjan Pai family. “Therefore, a decision was taken that Manipal would buy out the Temasek stake in Medica. For Manipal, it is like making any other acquisition to add beds to its network,” the source added.

 

A Temasek spokesperson said: “As a matter of policy, Temasek does not comment on market speculation. Thus, we decline to comment.” Manipal Hospitals and Medica said they would not like to comment on the matter.

Manipal Health is expected to launch an initial public offering (IPO) to offer an exit for its existing investors.

According to industry insiders, Manipal Health Enterprises closed FY24 with revenues of around Rs 6,500 crore at a consolidated level and an Ebitda of approximately Rs 1,600 crore, resulting in an Ebitda margin of over 25 per cent. The average revenue per occupied bed stands at about Rs 2 crore at a network level.

Both hospital chains are in expansion mode. Manipal Hospitals plans to add 1,200 beds over the next 18-36 months, while Medica aims to increase its capacity by 450-500 beds within the next two to three years.

Both Medica and Manipal have a strong presence in the eastern India market. Medica operates around 600 beds in Kolkata and is expanding its capacity in Siliguri and Ranchi. They are also building a cancer hospital in Asansol.

Earlier in April, Temasek had increased its stake in Manipal Health Enterprises by acquiring an additional 41 per cent from the promoters and other investors, including TPG and NIIF (National Investment and Infrastructure Fund), at an enterprise valuation of around Rs 40,000 crore. Last year, Temasek’s stake in Manipal increased from 18 per cent to 59 per cent. Subsequently, three more sovereign funds, including Mubadala Investment Company, became investors in Manipal Health, with Temasek holding a 52 per cent share.

In an interview with Business Standard in September, Manipal Health Enterprises Managing Director and Chief Executive Officer Dilip Jose said they had 1,300 beds in Kolkata (following the AMRI deal) and were planning to further expand into tier-2 and smaller towns in West Bengal. Manipal is also in the process of establishing three hospitals in Bengaluru, totaling 750 beds, and adding another 350 beds in Raipur.

Manipal Hospitals added 1,200 beds through its acquisition of Emami Group-owned AMRI Hospitals for Rs 2,300 crore in September.

In December, Ayanabh Debgupta, co-founder and joint managing director of Medica, told Business Standard that the hospital chain was focusing on cancer care in their expansion plans, with facilities planned in Asansol, Guwahati, and Varanasi.

Meanwhile, Medica’s Co-founder and Chairman Alok Roy exited the hospital group some time ago. Nandakumar Jairam was appointed as the new chairman around May.

Temasek’s healthcare platform, Sheares Healthcare, increased its shareholding in Medica to 90 per cent by providing an exit to Roy and related entities. In December 2021, Temasek acquired the stake previously held by Quadria Capital, thereby holding a majority stake of around 75 per cent.