Aster DM Healthcare’s India and GCC Business Separation

On Wednesday, Aster DM Healthcare announced in an exchange filing about the company’s plans to separate its India and GCC businesses to unlock long-term value.

Aster’s India and GCC Business Separation

In an exchange filing, the private healthcare services provider Aster DM Healthcare, announced the separation of its Indian and the Gulf Cooperation Council (GCC) businesses. The proposed investment in its GCC business by an investor group led by UAE-based PE firm Fajr Capital is in the final stage of completion.

Regarding the same, Aster DM Healthcare stated, “In November 2023, corporate approvals were received to separate the company’s India and GCC businesses into two distinct and standalone entities to unlock long-term value. Under the separation plan, a Fajr Capital-led consortium entered into a definitive agreement to acquire a 65% stake in the company’s GCC business. The plan was approved by the company’s shareholders in January 2024.”

They further added that as a part of the completion process, the Fajr Capital-led consortium has also acquired the necessary approvals from the Kingdom of Saudi Arabia’s General Authority for

Competition (GAC). All conditions precedent outlined in the Sale and Purchase Agreement (SPA) are now done.

They also said that no-objection certificates, as required from key partners, have been received and local and regulatory authorities in GCC have been informed as necessary about the separation of the businesses and the imminent completion of the transaction. The integration of business operations in Qatar into the transaction perimeter of Aster DM Healthcare FZC has also been successfully completed.

The company also informed us that the Moopen family will continue to lead and operate the GCC business, maintaining a 35% stake in the buyer entity. The existing shareholders will continue to remain with the listed Indian entity, Aster DM Healthcare Ltd. Upon successful completion of the transaction, the company plans to declare a significant portion of the proceeds as dividends to its shareholders, subject to approvals required under the law.

Mentioning their plans for their Indian entity, the company stated that they are planning to add 1,500 beds by FY 2027 and aim to be among the top 3 hospital chains in India. They designed an outlay of ₹850-900 crore, which will ensure robust financial support for driving the expansion.

On March 21, 2024, the share price of Aster DM Healthcare Ltd opened at ₹444.00, touching the day’s high at ₹449.45, as of 1:31 PM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.