Gulf business to be sold for $1.01 billion

In an exchange filing on November 28, Aster DM Healthcare said that the company will separate the India and GCC businesses into two distinct and standalone entities which will unlock value for the shareholders by allowing both businesses to adopt a market-focused strategy and create sustained long-term growth.

Under the separation plan, a consortium led by UAE-based private-equity firm Fajr Capital will acquire a 65% stake in the ownership of the GCC business, Aster DM Healthcare FZC. The Moopen family, the promoter entity, will continue to manage and operate the GCC business by retaining a 35% stake.

As per the regulatory filing, Aster’s subsidiary Affinity would sell its stake in Aster DM Healthcare FZC to Alpha GCC Holdings for $1.01 billion. Of this amount, $903 million will be paid at closing (subject to customary adjustments), and $98.8 million to be received subsequently, subject to contingent events.

The current market cap of the combined India and GCC business stands at around $2 billion. The transaction values the GCC business at an enterprise value of $1.7 billion (₹13,540 crore), and an equity value of $1 billion (₹8,215 crore).

“Existing shareholders to remain with the listed Indian entity, Aster DM Healthcare Ltd. Upon successful completion of the proposed transaction, the Company is desirous of declaring dividends to the shareholders of Aster DM Healthcare Ltd from the proceeds, subject to approvals required under law,” Aster DM Healthcare say in the release.

The release notes that Dr. Azad Moopen will continue in his role as the founder & chairman and will oversee both India and GCC businesses, while Alisha Moopen will be promoted to the position of Managing Director and Group CEO of the GCC business. Dr. Nitish Shetty will continue as the CEO of the Aster business in India.

As per the company, the GCC and India healthcare markets are distinct and have different growth dynamics, warranting different business strategies. With a population strength of 1.4 billion, India will remain a priority market in Aster DM Healthcare’s growth journey. The company plans to ramp up bed capacity in India by almost one-thirds, by adding more than 1,500 beds by FY27. In the GCC, Aster DM Healthcare FZC will bolster its expansion plans in key markets, such as the UAE and Saudi Arabia, while enabling greater access to quality and comprehensive healthcare across physical and digital channels.

Aster DM Healthcare Gulf business

Aster DM Healthcare shares skid 4% on plan to divest Gulf biz; analysts bullish