Aster India keenly exploring acquisition opportunities

KOCHI: Aster DM Healthcare, India  (Aster India), currently flush with funds after receiving substantial proceeds from the sale of its GCC vertical, is now nurturing ambitious growth plans.

Over and above its organic plans to increase bed capacity and number of hospital, the healthcare major has hinted at new inorganic plans to acquire hospitals if suitable opportunities arise.

After distributing 80 per cent of its GCC proceeds at $908 million (approximately Rs7,500 crore) as dividend to its shareholders, in an unprecedented gesture of largesse, the company is still left with free funds to the tune of approximately Rs1,500 crore.

Huge potential

The fact that India has a low hospital bed density with only 15 beds per 10,000 people, significantly lower than the global average of 29 beds, hands out huge growth potential for healthcare industry players.

Aster said it has finalised plans to add approximately 1,700 beds, bringing the total bed count to 6,500 by the end of the financial year 2026-2027 (FY27).

The healthcare major is also pursuing ambitious plans for inorganic growth, with a focus on acquiring multi-specialty hospitals.

Eyeing top three

The company said it is actively seeking inorganic growth opportunities with the objective of becoming one of the ‘Top Three’ healthcare players in the country.

 “We’re focusing on acquiring multi-specialty hospitals in states where we already have a presence or in the neighbouring states such as Maharashtra and Tamil Nadu,” said Alisha Moopen, deputy managing director, while elaborating on growth plans.

The segregation of GCC business early this year has handed out a windfall that amounted to $907.6 million for the Indian entity.

Net cash

The CEO of Aster India, Dr Nitish Shetty, said the company’s net cash stands at Rs1,041 crores as on June 30, compared with a net debt of Rs565 crore as on  June 30, 2023.

“So currently, our cash and cash equivalents is around Rs1,700 crore. We are still looking at a lot of inorganic opportunities and looking at the various acquisition opportunities also,” he added.

The current expansion plans need about Rs1,200 crore, where Rs200 crore has already been spent leaving another Rs1,000 crore more needed to be spent on that plan by 2027.

No plan to exit

Emphasizing that there is no intention from the promoters to exit, she reminded that chairman’s (Dr Azad Moopen) vision has always been how Aster could become one of the top three. “So we are just looking at the right opportunities in terms of mergers and acquisitions that are available,” she added.

Alisha Moopen scotched rumours of promoters planning to exit or dilute stake in the company. To a query whether Aster is looking at roping in private equity partners for the Indian operations, she said, “the only thing I can mention is, of course, we are quite geared up to expand the India network.”