Aster DM Healthcare and Quality Care to merge; aims to be among top 3 hospitals in India

Aster DM Healthcare on Friday announced merger with Blackstone-owned hospital platform Quality Care India Ltd (QCIL) with an objective to create one of the top 3 hospital chains in India. The merged listed entity will be called Aster DM Quality Care Limited, one of the largest privately held hospital chains in India with strong presence across South and Central cities across the country, according to an official statement.

“Aster DM Healthcare Limited (“Aster”), one of India’s largest and fastest growing integrated healthcare service providers, and Quality Care India Limited (“QCIL” or “Quality Care”), backed by Blackstone and TPG, one of the largest privately held hospital chains in India with a focus on emerging cities, have today signed definitive agreements for a merger,” Aster DM Healthcare says in a release.

“The merger has been approved by the Board of Directors of the respective Aster DM Healthcare on Friday announced merger with Blackstone-owned hospital platform Quality Care India Ltd (QCIL) with an objective to create one of the top 3 hospital chains in India. The merged listed entity will be called Aster DM Quality Care Limited, one of the largest privately held hospital chains in India with strong presence across South and Central cities across the country, according to an official statement.companies and is subject to regulatory, corporate and shareholders’ approvals. The merged listed entity will be named Aster DM Quality Care Limited,” the release notes.

As per the release, the merged entity will have a combined portfolio of four leading brands: Aster DM, CARE Hospitals, KIMSHEALTH and Evercare. The combined entity will have a of network of 38 hospitals and 10,150+ beds spread across 27 cities making it one of the top 3 hospital chains in India. The deal is expected to close by Q3 FY26.

“The Moopen family who has been instrumental in managing Aster's India and GCC businesses will also lead the new merged entity…The integration of Aster and Quality Care’s extensive network and deep operational expertise with backing from Blackstone and TPG – among the most respected private equity firms will enhance our ability to deliver world-class healthcare services, drive innovation, and improve patient outcomes,” says Azad Moopen, Founder and Chairman of Aster DM Healthcare.

Aster is valued at a multiple of 36.6x on FY24 adjusted post IND AS EV/ EBITDA. In comparison, QCIL is valued at a multiple of 25.2x based on FY24 adjusted post IND AS EV/ EBITDA. Based on the swap ratio recommended in the valuation report, the resultant shareholding of the merged entity will be 24% and 30.7% held by Aster promoters and Blackstone respectively, with the balance 45.3% being held by public and other shareholders.

Subject to necessary approvals, 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.

Ahead of this 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.