Apollo Hospitals Enterprise Ltd and billionaire Gautam Adani are evaluating bids to acquire a majority stake in diagnostic chain Metropolis Healthcare Ltd, according to a livemint report. The deal size could be at least $1 billion (over Rs 7,750 crore) given the market cap of Metropolis and its operations in India, said the report quoting sources.
It marks the next step in Adani Group’s foray into healthcare, and the conglomerate is said to have earmarked $4 billion to gain a foothold in the segment and is in talks with investors and lenders to devise a long-term funding.
Started with a single lab in 1980s, Metropolis received its first external funding of Rs 35 crore from private equity firm ICICI Venture in 2005. It now has a presence in 19 states, mainly in western and southern parts of the country.
The Adani Group announced its foray into the healthcare sector on May 19. It said the company incorporated a wholly-owned subsidiary for healthcare-related services. Adani Group is one of India’s largest business conglomerates, with more than $20 billion in annual revenue. It has a presence in power, green energy, infrastructure, food processing, and airports, among other industries.
Adani Enterprises in a BSE filing said, “With reference to the captioned subject, we would like to inform you that Adani Enterprises Limited has incorporated a WOS (wholly-owned subsidiary), namely Adani Health Ventures Limited (AHVL), on May 17, 2022, with an initial authorised and paid-up share capital of Rs 1,00,000 each to carry on the business of healthcare-related activities including, inter alia, setting up, running, administrating medical and diagnostic facilities, health aids, health tech-based facilities, research centers and to do all other allied and incidental activities in this regard. AHVL will commence its business operations in due course.”
The Adani Group has made over 30 acquisitions since 2014 in different verticals and businesses, and has grown at a scorching pace. It is a dominant player in several sectors such as cement, ports, airports and power.
The healthcare sector is expected to grow exponentially in India. The industry has been growing at a compound annual growth rate (CAGR) of around 22 percent since 2016, according to a recent report released by the Niti Aayog, the government’s think-tank. At this rate, it is expected to reach $372 billion in 2022, the report said.
Last month, the Adani group also clinched a deal to acquire a controlling stake in Holcim Ltd’s businesses in India for USD 10.5 billion, marking the ports-to-energy conglomerate’s entry into the cement sector. The group will acquire 63.1 per cent of Ambuja Cements Ltd along with related assets. Ambuja’s local subsidiaries include ACC Ltd, which is also publicly traded.
“The Adani Family, through an offshore special purpose vehicle, announced that it had entered into definitive agreements for the acquisition of Switzerland-based Holcim Ltd’s entire stake in two of India’s leading cement companies – Ambuja Cements Ltd and ACC Ltd,” the group said in a statement.
Shares of Adani Enterprises on Tuesday were trading marginally up at Rs 2,223.85 apiece on the BSE.
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