PE: Morgan Stanley PE Asia fund invests Rs. 500 Crore in Omega Hospitals.

by | Jul 8, 2024 | Insights, Private Equity & IPO | 0 comments

Transaction:

  • Morgan Stanley PE fund, invested INR 500 Crores for a minority stake of 23% stake in Hyderabad Institute of Oncology Private Limited (Omega Hospitals), valuing the hospital chain at more than Rs. 2100 Crores.
  • It will support the ambitious plan of Omega Hospitals to expand its presence across multiple states of India.

About Omega Hospitals:

  • Founded in 2010, led by surgical oncologist and managing director Dr Mohan Vamsy, Omega Hospitals is India’s second largest cancer-focused hospital chain.
  • The hospital chain currently employs 5,000 people, with eight hospitals in various cities and a combined capacity of more than 950 beds.

About Morgan Stanley PE Asia:

  • Established in 1993, the PE fund is one of the leading private equity investors in the Asia-Pacific region. It invest primarily in highly structured minority investments and control buyouts in growth-oriented companies across sectors particularly consumer products, industrial products, financial services, healthcare and technology.
  • Their portfolio investments include Kogta Financial, Golden Cloud Technology, Hyperon, CDP, ZCL Chemicals Limited and DSG Management.

Rationale:

  • The new funding will help the company expand its footprint across the twin states of Telangana and Andhra Pradesh, as well as neighbouring states such as Karnataka, Maharashtra, Tamil Nadu, Madhya Pradesh and West Bengal.
  • The plan is to grow the business through a combination of organic expansion and inorganic acquisitions across the markets. The funding from Morgan Stanley will catalyse the growth plans and help establish leadership position in cancer care.
  • This investment will enable to expand Omega’s footprint across India, enhance the existing facilities, and establish new hospitals, thereby providing advanced healthcare services to a larger segment of the Indian population.
  • With the increasing incidence of cancer in recent years, the mission to deliver high-quality, full-service cancer care offerings in India is of utmost priority. The partnership with Morgan Stanley PE Asia will accelerate this journey and build Omega Hospitals into India’s largest cancer care chain in the next few years.
  • This deal marks second investment in an Indian cancer hospital chain within a span of 12 months for Morgan Stanley PE Asia fund.
  • In the financial year 2023, Hyderabad Institute of Oncology Private Limited (Omega Hospitals) reported operating revenue of approximately 254 Crores and PAT of Rs. 12.7 Crores.
  • The healthcare sector in India is seeing a lot of excitement with deals like, HCG acquired 100% stake in SRJ CBCC Cancer Hospital, Indore for Rs. 45 Crore, Manipal Hospitals acquired 87% stake in Kolkata-based hospital chain Medica Synergie for Rs 1400 Crore, CVC Partners acquired around 59% stake in HCG for Rs 1,100 Crore.

Acknowledgements: 

RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)

Disclaimer:

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