Malaysia’s IHH Healthcare Bhd has submitted a bid to buy a controlling stake in Medanta-The Medicity super specialty hospital, two people aware of the development said. The bid values the premier hospital at Rs5,500-5,700 crore, the first of the two people said on condition of anonymity.

US-based private equity fund Carlyle Group owns 27% in Gurugram-based Medanta, while Singapore’s Temasek Holdings Pte holds 18%. Cardiac surgeon Naresh Trehan, his family and Medanta co-founder Sunil Sachdeva own the rest.

The deal, if it goes through, will be the latest in India’s hospital sector, which has seen recent transactions such as KKR’s Rs1,300 crore investment in Radiant Life Care.

Temasek is also likely to submit a bid for a majority stake in a few weeks, said the second person on condition of anonymity.

Spokespersons for IHH, Temasek and Carlyle declined to comment. An email sent to Trehan went unanswered.

IHH, Asia’s largest healthcare group, has been looking to acquire Fortis Hospitals for the last couple of years to expand its presence in India. It may acquire Fortis shares from the public and banks, Mint reported last week. Currently, 80% of Fortis’s shares are with the public, while 20% of pledged promoter shares are held by lenders Yes Bank Ltd and Axis Bank Ltd.

The Malaysian hospital operator already has a strong presence in India, which it entered in 2015 by buying a 51% stake in Continental Hospitals Ltd for Rs300 crore and a 74% stake in Global Hospitals Pvt. Ltd for Rs1,280 crore.

In 2013, Carlyle Group acquired a 27% stake in Global Health Pvt. Ltd, which owns, manages and operates Medanta, while Temasek bought its 18% stake owned by Punj Lloyd Ltd in Global Health in 2015.

However, the hospital has seen a drop in its revenue after several leading doctors left in the last couple of years, said the second person.

Top doctors who left Medanta and joined Fortis include Dr. Rajesh Ahlawat, who was chairman of Institute of Kidney and Urology; Dr. Vijay Kher, who was chairman, nephrology and renal transplant medicine; and Padma Shri winner Dr. Ashok Rajgopal, a leading knee and hip replacement surgeon who was chairman of Medanta’s Bone and Joint Institute. Dr. Gagan Gautam, who was head of urologic cancer surgery and robotic surgery, moved to Max Hospital in Saket.

Trehan was initially looking at a valuation of $1-1.2 billion (Rs6,500-7,500 crore) for Medanta a year ago, but a fall in revenue has hit the valuation, said the second person. The company’s revenue figures could not be independently ascertained. Medanta has also suspended its $250-300 million initial public offering plan, he added.

Price regulation of cardiac stents and knee caps has also brought down the revenue of hospitals across India.

In August, drug pricing regulator National Pharmaceutical Pricing Authority (NPPA) capped the prices of knee implants, reducing product prices by as much as 70%. NPPA had brought cardiac stents under price control in February to make them affordable. The price of drug eluting stents were slashed to about Rs30,000 from as much as Rs2 lakh.

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