Mid-market private equity fund Tata Capital Growth Fund is acquiring a minority stake in Chennai-based diagnostics company Aarthi Scans Pvt. Ltd, according to a joint statement by the companies.
The deal value is upwards of ₹200 crore, a person close to the transaction told VCCircle.
VCCircle first reported that Aarthi Scans was raising its first external capital last month.
“This investment from Tata Capital affirms our belief in our business model of providing high quality diagnostics services to the masses at an affordable price,” said V Govindarajan, chairman & managing director, Aarthi Scans, in the statement without disclosing the financial details of the transaction.
Founded in 2000, Aarthi Scans is currently managed by a family-run team of radiologists, Prasanna Vignesh, Aarthi Prasanna and Arunkumar Govindarajan. It has a chain of more than 45 diagnostic centres and over 100 collection centres spread across 10 states including Tamil Nadu, Karnataka, Telangana, Maharashtra, Delhi-NCR, Pondicherry, Kerala and West Bengal. The company plans to double its network by expanding in existing cities and entering other major metros, the statement said.
“We like Aarthi Scans and Labs for its more ethical approach, creating better alignment with its customers. With superior execution capabilities and exceptional promoters, we believe Aarthi is poised to become a leader in the industry,“ said Akhil Awasthi, managing partner, Tata Capital Growth Fund.
Tata Capital Growth Fund is a $240 million (around ₹1,700 crore) private equity fund of Tata group’s financial arm Tata Capital, which manages third party capital raised from investors globally. The fund targets growth capital investments in companies that derive a substantial portion of their revenue from operations in India.
Veda Corporate Advisors was the exclusive financial adviser to Aarthi Scans.
The pursuit of diagnostics assets by private equity firms indicates sustained investor interest in this space in the country, especially after the onset of the pandemic. A bunch of diagnostics companies in India have matured over the years with significant private equity funding and some have already hit the public markets.
Dr Lal PathLabs became the first diagnostics firm to float in late 2015. Thyrocare Technologies and Metropolis Healthcare followed suit. Last year, private equity-backed regional diagnostics firms, Krsnaa Diagnostics and Vijaya Diagnostic also went public.
Last week, Motilal Oswal Private Equity (MOPE) said it will invest up to ₹194.4 crore (around $25 million) through its fourth fund in Mankind Pharma’s diagnostics venture, Pathkind Labs. LiveMint