Narayana Hrudayalaya Ltd has agreed to acquire NewRise Healthcare Pvt. Ltd from Panacea Biotec Ltd for Rs 180 crore ($28 million), including debt, to set up its first hospital in Gurgaon.
The all-cash transaction is intended to consolidate the company’s footprint in the northern region, Bengaluru-based Narayana Hrudayalaya said in a stock-exchange filing.
VCCircle had first reported in 2014 that Panacea Biotec had put the Gurgaon-based hospital on the block and was looking to sell the asset at around Rs 200 crore.
NewRise has a near-complete multi-specialty hospital with 230 beds. The hospital is likely to be commissioned within nine months.
The new hospital will complement Narayana’s oncology-focused Dharamshila Narayana Superspeciality Hospital in eastern Delhi that will be upgraded to a multispecialty tertiary care unit, it said.
“This development is a step forward in the direction towards reinforcing the newly formed northern cluster," said Ashutosh Raghuvanshi, vice chairman, managing director and group CEO, Narayana Hrudayalaya.
"It also echoes the group’s commitment towards developing this region as vibrant as the existing Karnataka and eastern clusters," he added.
The company, which was founded in 2000 by Devi Prasad Shetty, has a network of 23 hospitals and seven heart centres across India. It also has a hospital in Cayman Islands. It has over 5,700 operational beds across all its centres with a potential to reach a capacity of over 6,900 beds.
Meanwhile, while the company has been buying assets to expand its presence, it last year sold its Hyderabad-based hospital Malla Reddy Narayana Multispecialty Hospital to partner Chandramma Educational Society.
The company had indicated that it would be open to more such sales in the future.
Narayana Hrudayalaya made a strong stock market debut early last year. Its private equity investors Pinebridge (formerly AIG Capital) and JPMorgan Partners part-exited in the IPO and they have been offloading their stake in the past months.
Other investors in the company include CDC Group and Singapore sovereign wealth fund GIC, which came as an anchor investor prior to the company’s IPO. Biocon chairman and managing director Kiran Mazumdar-Shaw owns a 2.3% stake in the hospital chain.
Narayana’s revenue from operations grew 17.6% to Rs 1,607.5 crore in the financial year ended 31 March 2016. It posted a net profit of Rs 19.12 crore in FY2015-16, against a loss of Rs 16.76 crore in the previous financial year.
Although it is the third-largest hospital chain by revenue and market value, it has a far higher number of beds compared with Fortis Hospital. Apollo Hospitals is the biggest hospital chain by the number of operational beds, revenue and market value.