Aster DM Healthcare plans a USD 108 million expansion in India while divesting its Gulf business. With ambitions to rank among India's top three hospital chains, Aster aims to add 1,500 beds by 2027. Despite India contributing only a quarter of its revenue, growth in the region outpaces the Gulf. Aster agreed to sell a majority stake in its Gulf business to a consortium led by Fajr Capital, distributing the proceeds to shareholders. Since the announcement, Aster's shares have surged by 32%, reflecting investor optimism. These strategic moves signal Aster's commitment to evolving in the healthcare sector while maintaining excellence in patient care.
Aster DM Healthcare, a prominent hospital chain based in India, announced its intention to invest up to 9 billion rupees (approximately USD 108 million) in expanding its operations within India as it nears the final stages of divesting its Gulf-based operations. Aster articulated its ambitious goal of reaching the uppermost tier of India's healthcare sector, striving to establish itself among the top three hospital chains in the country.
This vision involves enhancing its current bed capacity, which currently stands at 4,857 beds spread across 18 hospitals, by approximately 1,500 beds by the end of fiscal year 2027. In contrast, Apollo Hospitals, India's foremost private hospital chain, boasts a network comprising over 70 hospitals and a bed capacity exceeding 10,000, while Manipal Health operates 33 hospitals with more than 9,500 beds. Aster outlined its expansion strategy, which encompasses both the establishment of new hospitals and the enhancement of operational capacity in existing facilities.
In November last year, Aster actively agreed to divest a majority stake in its Gulf-based business, which constitutes about 75% of its total revenue, to a consortium led by private equity firm Fajr Capital. In response to opposition from a proxy advisory firm, Aster pledged to distribute approximately 70%?80% of the USD 903 million net proceeds from the sale to its shareholders. The consortium, under the leadership of Fajr Capital, obtained local antitrust clearance and secured approvals from key partners for the transaction, although Aster refrained from specifying the anticipated closing date.
Despite only a quarter of Aster's total revenue currently being contributed by India, the growth trajectory in India has surpassed that observed in the Gulf. Since the announcement of the deal in late November, Aster's shares have surged nearly 32% last week indicative of investor confidence in the company's strategic realignment and its prospects for domestic expansion.
In conclusion, Aster DM Healthcare's bold steps towards domestic expansion alongside divesting its Gulf-based operations underscore its dedication to evolving with the healthcare landscape. With ambitious plans to bolster its presence in India and cement its position among the top hospital chains, Aster is set for a transformative journey ahead. These strategic maneuvers position Aster for continued growth, innovation, and enduring excellence in patient care.
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