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Temasek may bid for CVC Capital Partners’ controlling stake in HCG

Singapore’s Temasek Holdings may bid for CVC Capital Partners’ controlling stake in listed hospital chain Healthcare Global Enterprises Ltd, two people aware of the development said. Other potential investors already in the race for CVC’s 60.4% stake include TPG, Bain Capital and VPS Healthcare (now Burjeel Holdings).

“Temasek will either bid alone or partner one of the other private equity funds,” one of the two people said, adding that potential suitors have submitted initial bids and are conducting due diligence now.

Shares of HCG closed at ₹358.80 a share on the NSE on Thursday, down 1.98%, while the Nifty index closed at 22,648.20 points. Its total market capitalization stood at ₹4,997.71 crore.

CVC Capital Partners, which purchased around 59% in Healthcare Global for ₹1,100 crore in 2020, raised its shareholding to over 60.4% later. At the current share price and market cap, the stake is worth over ₹3,004 crore.

When contacted, Dr B.S. Ajai Kumar, founder of Healthcare Global, said he does not plan to sell his close to 11% stake or increase his stake. Kumar declined to comment on the deal, directing all queries to CVC Capital Partners.

“I am not selling my stake. As far as I am concerned, I am the founder, a doctor, interested in oncology and I plan to continue at HCG,” Kumar, 71, said.

Kumar’s daughter Anjali Ajaikumar Rossi is executive director – strategy at HCG. Kumar also clarified that he is also not planning to increase his stake at the firm, dismissing rumours that he could partner with another private equity firm to help increase his stake. “No such consideration as of now,” he said.

Queries emailed to the spokespersons of TPG and VPS remained unanswered. Temasek and Bain Capital declined to comment.

Cancer care
Established in 1989, HCG operates primarily in oncology, with 23 cancer care centres as of 31 December, 2023, and four multi-speciality hospitals. The company has its presence in cities such as Ahmedabad, Chennai, Nasik, Ranchi, Rajkot, Cuttack, Hubli, Mumbai, Nagpur, Vizag, and Vijayawada. It is present across the oncology value chain, offering services from prevention, screening, diagnosis and treatment to rehabilitation, supportive care, and palliative care.

The company recorded an operating income of ₹1,417.5 crore in the nine months ending December 31, 2023. “Going forward, the company’s revenue growth is expected to remain healthy driven by increasing cancer incidence in addition to HCG’s established position in the oncology segment. Further, the company expected to witness improvement in profitability margins supported by improving operating leverage, reduction in losses and turnaround of its emerging centres, and continued improvement in payor mix,” a 28 March ratings report by ICRA said. LiveMint

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