Quadria Capital buys Samara's 14% stake in AIG Hospitals

Mumbai: Healthcare-focused Asian PE fund Quadria Capital has acquired a minority stake in AIG Hospitals, Hyderabad based hospital group with over 1000 beds capacity and serving over 600,000 patients anually. Quadria has acquired about 14% stake in AIG from existing invetstor Samara Capital in a deal worth Rs.300 crore. With this investment, Quadria has increased its stake in AIG to 30%. Samara had invested in AIG in 2014.

Set up in 1986, AIG (Asian Institute of Gastroenterology) Hospitals is India’s foremost gastroenterology hospital. The Rs.500-crore AIG has a 800-bed superspecialty hospital in Gachibowli and another 300-bed hospital in Somajiguda in Hyderabad. Promoter Dr. D. Nageshwara Reddy and family holds about 60% stake while individual investors hold rest of the stake in AIG Hospitals.

It is the second exit by Samara Capital in 2019, as the fund had sold its investment in Ganga Kaveri Seeds to the US based RiceTec AG in March. Co-founded by former Citi Group executives Sumeet Narang and Gautam Gode, Samara invested in companies such as Flemingo Duty Free, TVC Sky Shopping, Asian Oilfield, Sahajanand Medical Technologies, Monte Carlo Fashions, Guardian GNC, Paradise Foods and Sapphire Foods.

Home grown PE fund Samara is also in the process of raising its latest fund worth $500 million. Previously, Samara had raised two funds - fund I of $260 million and fund II of $400 million with a large co-investment pool.

“Samara has been a keen investor in the healthcare sector and has been at the forefront to invest and back pioneering companies in this field. During our investment tenure, AIG has added bed capacity almost 4-fold and has also created new centers of excellence transforming from a super-specialty to a multi-specialty hospital,” said Sumeet Narang, Founder and Managing Director, Samara Capital.

“We at AIG Hospitals are passionate about bringing world-class medical expertise, innovation and technology to India for the benefit of our communities,” said Dr D. Nageshwar Reddy, Chairman and Managing Director, AIG Hospitals.

With assets under management exceeding $1.8 billion and 18 investments across the Asia-Pacific region, Quadria Capital has a wide exposure into Indian hospital sector.

It holds investments in Medica Superspecialty Hospital, leading hospital chains in eastern India; Krishna Institute of Medical Science (KIMS), one of the largest hospitals in Southern India with a total bed capacity of over 1800; and Bengaluru-based super-specialty oncology hospital chain Healthcare Global.

Quadria and investors in Medica is in the process of selling their majority stake and in early stages of discussions with private equity funds and other healthcare groups. Along with Europe-based co-investors DEG and Swedfund, Quadria holds about 67% in the 400-bed Medica.

The hospital industry will require an investment of around $245 billion over the next 20 years, according to a recent PwC report. India needs to add 3.6 million beds, 3 million doctors and 6 million nurses over the next 20 years, it added.