New Delhi: Private healthcare service provider Aster DM Healthcare Ltd (India) is looking to strengthen its foothold in the northern and western regions of the country.
Nitish Shetty, chief executive of Aster Healthcare India, said in an interview that the company is exploring inorganic growth opportunities as the next means to grow.
Aster is looking to fund this growth path through internal accruals, which have been bolstered by the sale of the GCC (Gulf Cooperation Council) business. The company is also in conversation with some private equity players to partner with.
“We find Maharashtra, and Pune, highly attractive, drawing parallels with our experience in Bengaluru. Pune offers a promising opportunity due to its similar geography and demographics,” said Shetty.
“While we have a modest presence in Hyderabad, there’s a desire to expand. UP (Uttar Pradesh), with its burgeoning market, is attractive, considering the recent trend of north-based groups venturing into the region,” he added.
Currently, Aster is present in five states in the south through 19 hospitals, 13 clinics, 226 pharmacies and 251 patient experience centres.
Its hospitals in India are in Kochi, Kolhapur, Kozhikode, Kottakkal, Bengaluru and Hyderabad.
“We’ve earmarked around 1,500 beds for our expansion plan over the next three years, a transparent commitment outlined in the public domain. This funding, a mix of brownfield and greenfield projects, fuels our growth strategy. With our present standing at 4,800 beds, an additional infusion of 1,500 beds for the next three years for which we have an outlay of ₹850-900 crore will ensure robust financial support,” said Shetty.
He added that over the next two-three years, the company wants to take the total tally of beds in India to more than 6,000, which will include the upcoming Aster Capital in Trivandrum with 350-plus beds in the first phase by FY26, and Aster MIMS Kasargod with 200-plus beds. ”Then we would be looking at adding bed capacity to our existing hospitals in Medcity, MIMS Kannur by about 100 beds each and Aster Whitefield with 159 beds,” he added.
According to Shetty, the company is also in talks with several private equity companies to come in, as the promoters are resolute in their stance to continue running the business, and “affirming commitment to maintaining a prominent market presence and driving towards becoming the industry leader.”
Last year, the company announced that its subsidiary would sell its stake in Aster DM Healthcare FZC to Alpha GCC for $1.01 billion, which it will use to fund its growth.
Private equity player Olympus Capital, which holds a 19% stake in the company, is looking to sell its stake, a person close to the matter revealed.
Private Equity firm KKR & Co., Canadian Pension fund Ontario Teachers’ Pension Plan (OTPP) and Blackstone-backed Care Hospitals have shown keen interest in the hospital and pharmacy chain.
They have reportedly submitted non-binding term sheets to acquire a stake in Aster’s India business.
This comes at a time when private equity and venture capital investors have been keen on investing in hospitals.
These investments have reportedly risen 15 times to cross ₹30,000 crore over four years from ₹1,921 crore in pre-covid 2019.
“Whether through inorganic or organic means, our objective is to establish dominance in the industry. Our approach is agnostic, focusing on what aligns with our brand and serves the best interests of our business and stakeholders. We remain open to various partnership models, committed to choosing the path that is right for us,” Shetty said.
The company is also looking to expand its small hospital ventures, which will help it maintain a strong grip in Tier II and Tier III cities.
“We’re now exploring the possibility of scaling up from the asset-light model to regular hospitals, testing the market, and serving not just the local community but also expanding,” Shetty said.
He believes that this regional approach will allow Aster DM to thrive in tier-II and tier-III cities where others have faltered, leveraging its expertise and success in these regions. “With 70% of our business already thriving in tier-I, tier-II and tier-III cities, Aster is uniquely positioned to roll out this model across more locations, offering a sustainable healthcare solution with proven success beyond metro areas,” he added.
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