PE firm Olympus to sell almost 10% stake in Aster DM Healthcare: Report

Private equity firm Olympus is planning to sell about 9.8 per cent of its existing stake in Aster DM Healthcare through a block deal. The deal will fetch Rs 19.53 billion (nearly $234.5 million), Reuters reported on Tuesday.

Olympus Capital, which owns about 19% stake in the hospital chain, is planning the sale at Rs 400-437.20 per share. The offer size is valued at Rs 1,952.8 crore. The lower end of the range represents an 8.5% discount to Aster DM stock’s last close and no discount at the upper range. Kotak Mahindra Capital is the advisor on the proposed block trade.

Shares of Aster DM Healthcare Ltd closed at Rs 436.65, down by 0.55%.

Last week, Aster DM Healthcare Ltd announced that the separation of its India and GCC businesses. It added that the proposed investment in the company’s GCC business by Fajr Capital, a sovereign-owned private equity firm headquartered in the UAE, is nearing completion.

Under the separation plan, a Fajr Capital-led consortium entered into a definitive agreement to acquire a 65 per cent stake in the company’s GCC business, which shareholders approved in January 2024.

The company received corporate approvals to separate the businesses into two distinct and standalone entities in November 2023.

Business Today reported that Aster DM Healthcare is looking to double down on the Indian market and plans now to expand into the north Indian market. The hospital chain’s healthcare centres are currently concentrated in south India, mainly in Kerala — six of its 19 Indian hospitals are located in the state.

In Q3 FY2024, Aster DM Healthcare reported a 28.6% year-on-year (YoY) jump in net profit at Rs 179.2 crore. The company’s revenue from operations increased 16.2% to Rs 3,710.6 crore against Rs 3,192.1 crore in the corresponding period of the preceding fiscal.

At the operating level, EBITDA rose 25.7% to Rs 564 crore in the third quarter of this fiscal over Rs 448.6 crore in Q3 FY23.

The EBITDA margin stood at 15.2% in the reporting quarter against 14.1% in the year-ago period. EBITDA is earnings before interest, tax, depreciation, and amortisation.

The company’s operational revenue grew 16% year-on-year to Rs 3,711 crore against Rs 3,192 crore in Q3 of FY23. Operating EBITDA grew 28% YoY to Rs 583 crore against Rs 456 crore in the September-December quarter of FY23.