PE: Kauvery Hospital raises funds from PE fund managed by IIFL
Transaction:
- Kauvery Hospital raised US$70 million in equity funding from a private equity fund managed by IIFL Asset Management Limited (IIFL AMC) for a minority stake.
- As per various news media reports the deal valued the Kauvery Hospital for upwards of Rs. 3000 Crore.
About Kauvery Hospital:
- Established in 1999 as a 30-bedded hospital in Trichy, Kauvery Hospital today has a network of 8 facilities comprising 1,500 beds spread across six cities in South India including Chennai, Trichy, Bangalore, Salem, Hosur and Tirunelveli.
- As per the report by credit rating agency, the hospital chain generated consolidated revenue of Rs 847 Crore in FY22 and Rs. 597 Crore in FY21.
- The company’s out-patient and inpatient (IP) counts were over 500,000 and 60,000 in FY22.
- Its average revenue per occupied bed (ARPOB) was Rs. 26,102 (FY21: Rs. 23,907), and the average length of stay (ALOS) was 4.1 days (FY21: 4.1 days) in FY22 on a consolidated basis. The company’s bed occupancy level in FY22 was 73% (FY21: 62%) on a consolidated basis.
About IIFL AMC:
- IIFL AMC, part of 360 ONE, is an alternative asset management firm with overall assets and public market investments of more than US$7 billion.
- IIFL PE has AUM of approximately USD 3 billion and investment strategies extending from mid-stage venture capital to pre-IPO investments.
Rationale:
- The Hospital is already backed by investors such as Lightrock and GSK Velu’s family office.
- The investment holds significance in Kauvery Hospitals next phase of growth which is likely to move towards an IPO tentatively in the next 3 years, which comprises augmenting capacities in Chennai and Bangalore, along with expansion in chosen clusters within Tamil Nadu and Karnataka. The hospital will remain a leading player in South India.
- This investment would mean that the network shall comprise 15 hospitals spread across seven cities in South India, with 3,000 beds and shall go for an IPO in the next 36 months.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
Disclaimer:
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction.
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