PE firm TPG to re-invest its 11% stake in Manipal Hospitals through new fund

Global alternative asset management firm TPG will re-invest its 11 per cent stake in Manipal Health Enterprises Pvt Ltd (MHEPL) through its new fund -- TPG Asia VIII, Manipal Hospitals said on Monday. This announcement from Manipal comes in the wake of the formal announcement of Singapore's private equity firm Temasek saying that it has acquired an additional 41 per cent stake in the hospital chain.

In a premium deal, while National Investment & Infrastructure Fund (NIIF) will exit its holding from the company, the Ranjan Pai-led Manipal Group will hold about 30 per cent of MHEPL, following the closing of the transaction. As per the agreement, Sheares Healthcare Group, a wholly-owned subsidiary and independently-managed portfolio company of Temasek, will retain its existing 18 per cent stake.

TPG, which first invested in MHEPL through TPG Asia VI in 2015, will fully exit, but it will hold an interest of 11 per cent in the hospital chain through its new Asia fund, the TPG Asia VIII, MHEPL said.

"Since our investment in 2015, we have witnessed Manipal’s transformational journey of becoming one of the largest, best-managed and patient-centric healthcare networks in India. By re-investing through our new Asia fund – TPG Asia VIII, we look forward to continuing to support Manipal’s mission of bridging the quality healthcare infrastructure gap in the country,” Puneet Bhatia, Co-Managing Partner of TPG Capital Asia, said.
 
“Leveraging its pan-Asia presence and platform-building strategy, TPG Capital Asia has developed a strong track record in the healthcare sector. Its growing healthcare portfolio includes Sai Life Sciences, Pathology Asia, Columbia Asia, iNova, Novotech, Kangji and Dingdang Health,” said Bhatia.

Manipal Hospitals, one of the leading players in the healthcare delivery in India was founded in 1991, by Dr Ramdas Pai. Headquartered in Bengaluru, Manipal Hospitals has a pan-India presence. The hospital chain currently serves over 5 million patients a year through its network of 29 hospitals.

“Investing in healthcare requires a long-term outlook as well as sensitivity to social responsibility. NIIF partnered with us at a critical juncture, at the peak of the covid-19 pandemic and supported us as we continued to provide high-quality healthcare,” Ranjan Pai, Chairman of Manipal Group, said.

Manipal Group has been on an expansion mode for the last few years. In 2021, the hospital major bought the chain Columbia Asia and Vikram Hospitals, along with the diagnostics company, Medcis Pathlabs, acquisitions which made MHEPL the country's second-largest hospital chain, with around 8,300 beds, spread across 16 cities.

At a valuation of around Rs 40,000 crore (or north of $2 billion), healthcare analysts see the Temasek - Manipal deal as part of an increasing trend of private equity doing control deals in the Indian healthcare sector. The deal is also being considered as one of the biggest in the Indian healthcare space.

Also read: Why is Temasek-Manipal Health Enterprises deal 'premium'?

Also read: Singapore's Temasek buys Manipal Hospitals; valuation surges to Rs 29,000 crore: Report