India's ASG Hospital secures $188m led by General Atlantic, Kedaara Capital

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ASG Eye Hospitals, headquartered at Jodhpur (Rajasthan), has raised a whopping Rs 1,500 crore ($188 million) led by private equity (PE) firms General Atlantic and Kedaara Capital, per an announcement.

The transaction marks the largest fundraise in the eyecare industry in India and also the largest PE transaction in the single specialty healthcare industry to date.

General Atlantic and Kedaara Capital will join existing operations-focused healthcare investor Foundation Holdings in supporting and fuelling ASG Eye Hospitals’ growth in Asia.

The transaction is also expected to pave the way for the exit of Investcorp, which invested in the company in 2017.

ICICI Securities acted as the exclusive financial advisor for the transaction.

Single-specialty hospitals or daycare centres are typically known to focus on specialty care services in any one area of healthcare — it can be eyecare, dental care, fertility or oncology, to name a few.

Among other big-ticket transcations in the eyecare segment, Dr Agarwal’s Health Care Ltd secured Rs 1,050 crore from TPG Growth, one of the leading investment firms in the US, and its existing backer, Singaporean state holding company Temasek.

ASG Hospital plans to use the capital to fuel its expansion plans, it said in a statement.

The reasons for the rise of single-specialty chains can be attributed to two factors. First, they have specialised doctors, and second, in a lot of ways, they work out cheaper for consumers.

In multi-specialty chains, there are costs associated with beds and the average length of stay of a patient. Also, there are sometimes additional charges pertaining to ICUs.

However, it’s not single-specialty hospitals that are evincing investor interest alone. In the multi-specialty segment, a host of hospitals are currently on the road, negotiating with PE and VC firms as well as strategic investors, as they look to capitalise on the abatement of the pandemic and unmet demand for healthcare services in the country.

These include names such as Ivy Health and Life Sciences, Paras Healthcare, Sahyadri Hospitals and Kauvery Hospital.

With the onset of the pandemic, postponement of planned surgeries and reduced OPD footfalls negatively impacted the core hospital business. However, with COVID infections subsiding and pressure on the healthcare ecosystem easing, the demand for planned surgeries has started witnessing a strong revival.

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