The promoters of Apollo Tyres Group, who own majority stake in Gurgaon-based Artemis Health Sciences, may consider divesting stake either partially or fully, as the hospital looks at raising growth capital, multiple sources familiar with the development said.
Artemis has a 260-bed tertiary care super-specialty flagship in Gurgaon's Sector 51 with an area of 525,000 square feet, which will eventually be expanded to 550 beds. The Apollo Tyres promoter Onkar Kanwar family owns over 80% stake in the hospital with the management of medical professionals and others holding around 18% stake.
Sources said the family has been seeking enterprise valuation of around Rs 450 crore for AHS, as the hospital also has excess real estate, the cost of which has been booked into the valuation. Meantime, one source said, the management could look at the buyout option along with private equity funds or other financial investors even though the appetite of funds for investments in standalone hospitals has been waning in recent times.
"I cannot comment on either one of your queries. Our expansion plans have always included raising funds, which we are looking to do. But I don't think that the promoter group is looking to exit or the management is looking for any financial buyer," said Dr. Kushagra Katariya, CEO of Artemis Health Sciences, when contacted by VCCircle. He declined to comment on the nature of fundraising plans.
Sources said the promoter group will not be in a hurry to sell stake, as their core tyres business has been performing well on the back of the auto boom. Apollo Tyres reported a 63% increase in total income to Rs 8,120 crore with net profit multiplying more than 4.5 times to Rs 653 crore. The promoter family owns 39.95% stake in Apollo Tyres, which as per today's closing price of Rs 64.80 is worth Rs 1,285 crore. The deal has been in the maket for a while now, one investment banking source added.
The healthcare services sector has been increasingly attracting PE investments in India since last year. Since July last year, PE firms invested $395 million across 18 deals in healthcare services and equipment firms, according to VCCEdge, the financial research platform of VCCircle.