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Max Healthcare earmarks $325 mn for acquisition, expansion

17 May, 2017

Billionaire Analjit Singh-led Max Group’s healthcare unit plans to acquire the 49% stake it doesn’t already own in Saket City Hospital Pvt. Ltd and expand its hospital operations for a total of $325 million (Rs 2,080 crore).

Max Healthcare Institute Ltd is exploring possibilities to fund the acquisition of the Delhi-based hospital from overseas markets and will raise $75 million from International Finance Corporation via secured non-convertible debentures, IFC said in a statement.

Interestingly, this come less than a week after the World Bank’s private-sector investment arm said that it was selling its entire 7.5% stake in Max Healthcare equally to Max India Ltd, which houses Max Group’s healthcare and its allied businesses; and Life Healthcare Group, South Africa’s second-largest hospital chain.

Max Healthcare Institute had acquired a 51% stake in Saket City Hospital from Singapore-based BK Modi Group company Smart Health City Pte Ltd in 2015. Smart Health City was the holding firm for Saket City Hospital, which started operations in 2013.

The Saket City Hospital complex comprises Max Smart Super Specialty Hospital, Max Super Specialty Hospital (West Block), and Max Super Specialty Hospital (East Block).

Following the acquisition, Max Healthcare plans to create a ‘medicity’ across the joint complex of the network hospitals located.
The company will develop the complex to create a specialised centre for premier quaternary care with seven centres of excellence for selected specialties to provide comprehensive clinical services, the statement said.

Max Group has grown is hospital network largely by setting up new facilities on its own. Its first acquisition of a hospital was in 2015, when Max Healthcare acquired 76% of Pushpanjali Crosslay Hospital for Rs 287 crore in Ghaziabad, in the national capital region.

Max Healthcare
IFC had acquired the stake in Max Healthcare in multiple tranches over a period of 10 years before its sold its entire stake in the company last week.

Max Healthcare, which competes with other hospital chains such as Apollo Hospitals and Fortis Healthcare, reported 23% growth in gross revenue to Rs 1,939 crore in the nine months through December 2016. Its operating profit grew 34% to Rs 203 crore during the period.

Last year, Max India had split its businesses into three verticals — life insurance, health and allied businesses, and manufacturing.
Following this, Max India became the holding company for Max Healthcare, Max Bupa Health Insurance and Antara Senior Living, which are focused on health and allied businesses.

The older listed Max India was renamed as Max Financial Services Ltd to focus solely on the group’s life insurance activity through its majority holding in Max Life Insurance Company. Subsequently, Max Financial and mortgage lender HDFC inked a deal to merge their life insurance arms to create the largest private life insurer in the country.

The third company that was spun off, Max Ventures and Industries Ltd, houses the group’s manufacturing unit Max Speciality Films.

*This article has been modified to fix factual inaccuracies.

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2 Comments
Shilpa . 6 months ago

USD 325 mn or INR 325 cr? Pls check again.

Archna Shukla . 6 months ago

It is $325 million. Thanks.

Max Healthcare earmarks $325 mn for acquisition, expansion

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