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Quadria Capital’s India Build-Out Fund partially exits HealthCare Global

22 August, 2016

India Build-Out Fund (IBOF), an SME-focused PE fund chasing deals in the education and healthcare space, sold a part of its stake in the recently listed cancer treatment hospital chain HealthCare Global Enterprises Ltd (HCG).

The fund, now under South and Southeast Asia-focused healthcare fund Quadria Capital, pocketed Rs 55 crore through a secondary sale transaction both on the BSE and NSE. It sold 2.6 million shares out of the 6.4 million shares it owned post HCG’s IPO in March.

IBOF along with PremjiInvest, the private investment arm of Wipro chairman Azim Premji, and Temasek, a state owned investment arm of Singapore government, had part exited during HCG’s IPO.

HCG’s IPO received 55% oversubscription but it was the weakest response for an IPO of a healthcare firm in the past one year. It also failed to enthuse investors during its stock market debut. A section of analysts, however, said that the company requires patience to unlock value as ocology is capital-intensive business, thus requiring a longer gestation period for the facilities compared with multispecialty hospitals.

During listing, the company’s shares had ended at Rs 170.95 apiece, down 21.6% from its initial public offering price of Rs 218. Its shares on Monday closed at Rs 213, up 2.53% on BSE in a weak Mumbai market.

HCG was founded in 1998 and started expanding in 2006. Its IPO came on the back of a string of spectacular listings by hospital chain Narayana Hrudayalaya Pvt. Ltd, diagnostics chain Dr Lal PathLabs Ltd, drugmaker Alkem Laboratories Ltd, and Syngene International, the contract research organisation arm of Biocon.

IBOF

In 2010, Milestone Religare—an equal JV between Religare Enterprises and Milestone Capital formed to manage IBOF—had announced an investment of Rs 31.2 crore in HCG.

IBOF is currently fully deployed across six investments including credit rating service agency Care Ratings, hospital chain KIMS and engineering examination preparation company Resonance.

Milestone Religare was acquired in 2013 by Quadria Capital—the fund managed by Abrar Mir and Amit Verma—after Milestone’s founder Ved Prakash Arya died in a freak accident in 2011. IBOF is led by Rajesh Singhal, who was its founding managing partner. He had left temporarily 2011 to join Tata Opportunities Fund, a $600 million vehicle focused on the group companies of the $100 billion salt-to-software conglomerate Tata group.

IBOF, which had floated its second fund two years ago, was initially looking to raise Rs 750 crore. It later added a greenshoe option to take the targeted corpus to Rs 1,000 crore and was looking to hit the first fundraising milestone by December 2014. It is yet to announce a formal fundraising milestone for the new fund. Last year, a key team member running IBOF quit to float a separate PE firm.

Religare held a 50% stake in IBOF while the remaining is believed to be held by its management and Quadria Capital. 

In the latest development, VCCircle has learnt that Religare is selling the remaining pieces under its global asset management business straddling both offshore and onshore alternative investment practice. The deals that are being closed will virtually end the business of Religare Global Asset Management (RGAM), a platform with around $20 billion of assets under management.

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Quadria Capital’s India Build-Out Fund partially exits HealthCare Global

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