Abraaj buys majority stake in Indian healthcare provider

Dubai-based Abraaj Group has agreed to buy a majority stake in the Indian healthcare provider Care, as it aims to tap India’s burgeoning multibillion dollar industry.

Care, which is based in Hyderabad, is the fifth largest healthcare provider in India, with 16 hospitals in nine cities. India’s spending on health care is rapidly increasing and more facilities are much needed.

Abraaj also plans to expand the chain into other countries where it has a presence.

“The implications of the healthcare gap in India are profound, but they translate into a long-term opportunity for Abraaj to help build a better and more sustainable healthcare infrastructure in the country,” said Sev Vettivetpillai, a partner and the global head of Abraaj’s thematic funds business.

“Care has been a pioneer in providing quality health care to middle and low-income patients in India, and has the potential for further expansion domestically and internationally.”

Abraaj did not disclose the financial details of the deal. It is acquiring the stake from Advent International, an American global private equity firm.

Abraaj said that the partnership would “focus on providing accessible and affordable care in underserved cities throughout India”.

India’s healthcare sector is expected to grow by 15 per cent annually to reach US$90 billion by 2017 compared with $58.2bn in 2014, according to KPMG. Its figures show that per-capita healthcare spending is expected to have risen to $88.7 last year from $57.9 in 2011.

There is soaring demand for treatment in India amid the proliferation of so-called lifestyle diseases, including diabetes and heart conditions.

It is not the only UAE-based company that is investing in India’s healthcare industry. Aster DM Healthcare, which has its headquarters in Dubai, in May launched in May the 5.5bn rupee (Dh302.28 million) first phase of a medical township that it is developing in Kochi, in Kerala.

Aster DM has also acquired hospitals in Hyderabad, Bangalore, Pune and Kolhapur, and plans to continue its expansion drive in the country.

Narayan Shetkar, the director of Singhi Advisors, a global investment banking firm based in Mumbai, says that India’s growing healthcare sector offers “significant business opportunities” for foreign and Indian companies alike.

He explained that Abraaj’s investment into Care Hospitals could help to “drive foreign investment into Indian healthcare market”, including from the Middle East, as well as allowing Care to expand its network across areas of India that are still relatively untapped when it comes to health care.

Abraaj said that the deal marked “Abraaj’s 28th investment in health care across growth markets”, with its previous transactions into the sector totalling almost $1bn.

It added that the latest deal would be “subject to customary closing conditions and is expected to conclude” this quarter.

The private equity group in October partnered with the Indian conglomerate Aditya Birla to invest in developing solar power plants in India.


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