Shares of Aster DM Healthcare extended their winning streak for the seventh straight session on Monday, rallying 23% during this period. The healthcare stock jumped nearly 5% in early trade today as investors rushed to buy the stock after billionaire Dr. Azad Moopen-led company announced merger with Blackstone and TPG-backed Quality Care India to form Aster DM Quality Care Limited. The merged entity is expected to become one of the top three healthcare chains in India, after Apollo and Manipal Hospitals, in terms of revenue and number of beds.

Continuing its gaining streak, Aster DM Healthcare shares opened higher at ₹508.2, up 1.7% over the previous closing price of ₹499.95 on the BSE. Extending opening gains, the healthcare stock gained as much as 4.9% to ₹524.5, while the market capitalisation rose to ₹25,875 crore.

At the current level, Aster DM shares trade 6% lower than its 52-week high of ₹558.30 touched on April 15, 2024, and 67% higher than its 52-week low of ₹312.25 hit on June 4, 2024. In the last one year, the stock has delivered a 30% return to its shareholders, while it surged over 46% in the past six months. The counter has added over 18% in the last one month.

In a post market hour release on Friday, Aster DM Healthcare announced its highly anticipated merger deal with multi-speciality healthcare provider Quality Care India (QCIL). The merged listed entity will have a network of 38 hospitals and 10,150+ beds spread across 27 cities, making it one of the top 3 hospital chains in India. In the merged entity, Aster promoters and Blackstone will hold 24% and 30.7% stakes, respectively, while the balance 45.3% will be owned by public and other shareholders.

Ahead of the merger, Aster will buy 5% shares in QCIL from private equity firms, Blackstone and TPG, in consideration of primary share issuance by Aster for 3.6% stake. Post the initial share acquisition, QCIL will be merged into Aster by way of a scheme of amalgamation. The transaction is subject to shareholder and regulatory approvals, and other customary conditions to closing. 

Post merger, Aster promoters and Blackstone will hold equal representation on the board and jointly oversee the merged entity. Dr. Azad Moopen, the managing director of Aster DM Healthcare, will continue in his role as the Executive Chairman and will oversee the merged Entity. Varun Khanna, Group MD of Quality Care, will be the MD and Group CEO of the merged entity.

As of now, Aster DM Healthcare has a network of 19 hospitals, 13 clinics, 212 pharmacies, and 232 labs and patient experience centres across 15 cities. Quality Care India Limited (QCIL), beginning in 1997, has grown into a leading multi-speciality healthcare provider with the acquisition of hospital chains like CARE Hospitals, KIMSHEALTH and Evercare, with a network of 26 healthcare centers operating over 5,150 beds across 14 cities.

According to a recent report by HSBC, 2025 is going to be a year of heavy expansion for hospitals in India in a bid to cater to strong demand for quality healthcare. Seven hospitals, including Apollo, KIMS, Aster, Rainbow, are planning to add 16,000 beds over 3-5 years, as compared to 4,000 beds added in FY19-24. On current visibility of capex projects, we see 40% of total planned beds being added in CY25. Asset-light models (O&M, brownfield expansion) and M&A account for 60% of total planned additions. We see hospitals continuing to pursue M&A in 2025,” it said in the report.

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