Apollo Hospitals Enterprise Ltd and billionaire Gautam Adani are evaluating bids to acquire a majority stake in diagnostic chain Metropolis Healthcare Ltd, according to a livemint report. The size of the deal could be at least $1 billion (more than Rs 7,750 crore) given the market capitalization of Metropolis and its operations in India, the report citing sources said.
It marks the next step in Adani Group’s quest for healthcare, and the conglomerate is said to have committed $4 billion to gain a foothold in the segment and is in talks with investors and lenders to come up with long-term financing.
Started with a single lab in the 1980s, Metropolis received its first Rs 35 crore external funding from private equity firm ICICI Venture in 2005. It is now present in 19 states, mainly in western and southern parts of the country.
The Adani Group announced its entry into healthcare on May 19. It said the company has established a wholly owned subsidiary for healthcare-related services. Adani Group is one of India’s largest business conglomerates, with annual sales of more than $20 billion. It is present in energy, green energy, infrastructure, food processing and airports, among others.
Adani Enterprises said in a BSE filing: “Referring to the caption, we would like to inform you that Adani Enterprises Limited established a WOS (wholly owned subsidiary) on May 17, namely Adani Health Ventures Limited (AHVL), 2022, with an initial authorized and paid-up share capital of Rs 100,000 each to engage in healthcare related activities including, among others, establishing, operating and managing medical and diagnostic facilities, health resources, health technology based facilities, research centers and all other related and incidental activities in this regard. start its business in due course.”
The Adani Group has made more than 30 acquisitions in various industries and companies since 2014, and has grown at a breakneck pace. It is a dominant player in various sectors such as cement, ports, airports and energy.
The healthcare sector is expected to grow exponentially in India. The industry has grown at a compound annual growth rate (CAGR) of about 22 percent since 2016, according to a recent report from the government think tank Niti Aayog. At this rate, it is expected to reach $372 billion by 2022, the report said.
Last month, the Adani group also entered into an agreement to acquire a majority stake in Holcim Ltd’s India operations for $10.5 billion, marking the port-to-energy conglomerate’s entry into the cement industry. The group will acquire 63.1 percent of Ambuja Cements Ltd, along with related assets. Ambuja’s local subsidiaries include ACC Ltd, which is also publicly traded.
The Adani family has announced via an offshore special purpose vehicle that it has entered into definitive agreements to acquire Holcim Ltd’s entire interest in two of India’s leading cement companies – Ambuja Cements Ltd and ACC Ltd. in a statement.
Shares of Adani Enterprises traded marginally on Tuesday at Rs 2,223.85 each on the BSE.
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