According to a Livemint report, Apollo Hospitals Enterprise Ltd and billionaire Gautam Adani are evaluating bids to acquire majority stake in diagnostic chain Metropolis Healthcare Ltd. The report quoted sources as saying that the deal size could be at least $1 billion (over Rs 7,750 crore) given Metropolis’ market cap and its operations in India.
It is the next step in Adani Group’s foray into healthcare, and the group is said to have invested $4 billion to gain a foothold in the segment and is in talks with investors and lenders for long-term funding. .
Started with a laboratory in the 1980s, Metropolis received its first external funding of Rs 35 crore from private equity firm ICICI Venture in 2005. It now has a presence in 19 states, mainly in the western and southern parts of the country.
Adani Group announced its foray into the healthcare sector on 19 May. It said the company has incorporated a wholly owned subsidiary for healthcare services. The Adani Group is one of the largest business conglomerates in India, with annual revenues of over $20 billion. It has a presence in power, green energy, infrastructure, food processing and airports, among other industries.
Adani Enterprises in a BSE filing said, “With reference to the above subject, we would like to inform you that Adani Enterprises Limited has incorporated a WOS (Wholly Owned Subsidiary Company), namely Adani Health Ventures Limited (AHVL) on 17th May 2022, with an initial authorized and paid-up share capital of Rs 1,00,000, to carry on the business of health related activities, including, inter alia, establishment, operation, administration, health support of medical and diagnostic facilities , health technology-based facilities, research centers and all other allied and incidental activities in this regard. AHVL shall commence operations of its business in due course.’
The Adani Group has made over 30 acquisitions across various verticals and businesses since 2014, and has grown at a rapid pace. It is a major player in several sectors such as cement, ports, airports and power.
The healthcare sector in India is expected to grow rapidly. According to a recent report released by the government think tank, NITI Aayog, the industry has been growing at a compound annual growth rate (CAGR) of around 22 per cent since 2016. At this rate, it is expected to reach $372 billion in 2022, the report said.
Last month, the Adani Group inked a deal to acquire a controlling stake in the business of Holcim Ltd. India for USD 10.5 billion, marking the port-to-energy group’s entry into the cement sector. The group will acquire 63.1 per cent of Ambuja Cements Ltd along with related assets. Ambuja’s local subsidiaries include ACC Limited, which is also publicly traded.
The group said, “The Adani family, through an offshore special purpose vehicle, announced that it has entered into definitive agreements for the acquisition of the entire stake of Switzerland-based Holcim Limited in two of India’s leading cement companies – Ambuja Cements Limited and ACC Limited. ” in a statement.
Shares of Adani Enterprises were trading marginally higher at Rs 2,223.85 on BSE on Tuesday.
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