Aster DM to double bed capacity to 10,000; infuse ₹1,000 crore

Aster DM Healthcare aims to increase its bed capacity to more than 10,000 over the next three years through acquisitions and organic growth, chief executive Nitish Shetty said in an exclusive interview with Mint. The hospital chain currently has around 5,000 beds, up from 4,800 last year.

The company plans to spend at least ₹1,000 crore to acquire 2,000-4,000 beds as it looks to become one of India’s top three healthcare providers, Shetty added. It is also looking to add 1,700 beds organically in the next three years and has announced the deployment of ₹1,000 crore for this.

Apollo Hospitals Enterprise is currently India’s largest healthcare provider with more than 10,000 beds, while Aster DM is predominantly in south India. It recently became a pure-play Indian healthcare brand after its $1-billion separation from Dubai-based GCC was finalised earlier this month.

“As a pure-play Indian player, we have a window of opportunity to be among the top three players in the country. Currently, the top players have around 10,000 beds. We will now look to maintain our growth momentum, organic and inorganic, by laying out a clear-cut plan,” he said.

“The inorganic plan is in line with what we are doing now in terms of cluster approach as we are more of a cluster-integrated healthcare provider. For this, we have some sale proceeds with us or might use our share price as the currency to fund an acquisition or even raise some debt if required,” Shetty added.

He added that the aim is to fund the acquisition without overleveraging the company beyond or diluting the promoters’ controlling shares. “We are currently in advanced talks with multiple hospitals beyond our current geography. The plan is to infuse more than ₹1,000 crore. There are a lot of institutional investors willing to be associated with us,” Shetty added. According to data from the Bombay Stock Exchange, the promoters have a 42% stake in the company.

Aster DM will look to tap Uttar Pradesh for inorganic growth, Shetty added. “Uttar Pradesh is a big market. With a population of 240 million, there is a huge opportunity. Despite north-based hospitals trying to fill the gaps in the market there, we feel there is enough for everyone. We don’t just intend to test the grounds there – we now have enough confidence, bandwidth, and expertise to do a full haul like we did in Bengaluru.”

On the company’s organic expansion plan, he said, “We are going to do it in the next three years through a combination of brownfield and greenfield expansion. About 60% of the 1,700 new beds will be brownfield and 40% greenfield. These will include two new hospitals, including one in Trivandrum with 450 beds.” LiveMint