ASK Pravi, a joint venture between ASK Group and Pravi Capital, has invested $9.8 million (Rs 60 crore) in Hyderabad-based Omni Hospitals for a significant minority stake. Through this funding, Omni Hospitals plans to expand operations to south and east India.
The company, which is promoted by INCOR Group, operates two hospitals located at Hyderabad and Visakhapatnam at present. INCOR Group, which has interests in real estate, IT and infrastructure apart from healthcare, is founded by Anand Reddy Gummadi and Surya Reddy Pulagam.
“OMNI plans to expand into a network of tertiary care hospitals across south and east of India in three-five years. The investment from ASK Pravi will help bring on experienced private equity professionals who can work closely with us as we scale up our operations,” Pulagam, managing director, OMNI Hospitals, said.
For this deal, Spark Capital acted as financial advisor to Omni Hospitals and Tatva Legal acted as the legal advisors to ASK Pravi. Grant Thornton conducted the financial and accounting due diligence for the transaction.
“Omni Hospitals has demonstrated the ability to execute and manage a scalable asset-light hospital model. Their philosophy of involving key doctors and creating value through a shared ownership will help the company as it scales up its operations across different towns,” Anand Vyas, managing partner, ASK Pravi Capital Advisors, said.
Vyas would be joining the board of the company from ASK Pravi.
ASK Pravi Private Equity Opportunities Fund invests in fast growing companies benefiting from domestic consumption growth in India. The fund focuses on investing in unlisted small and medium sized businesses in non-metro cities.
Multispecialty hospital chains have seen only a few investments in the last few months due to heavy capital expenditure and asset-heavy expansion model. The most recent investments include Fortis Healthcare raising $100 million from International Finance Corporation earlier this year.
A few multispecialty players operating on an asset-light model have raised lower capital investments; these include Cygnus Medicare which raised $2.97 million from Somerset in 2013.
(Edited by Joby Puthuparampil Johnson)