 "BPEA EQT set to acquire 60% stake in Indira IVF for Rs 6,000 crore")
Hong Kong-headquartered investment firm BPEA EQT will acquire a majority stake in India’s largest fertility services provider Indira IVF for an undisclosed sum.
Market sources revealed that Indira IVF has been valued at over Rs 10,000 crore. BPEA EQT will pick up around 60 per cent stake for about Rs 6,000 crore. Indira IVF declined to comment on the deal size.
BPEA EQT is part of EQT, a Swedish global investment firm. BPEA EQT combines the private equity teams from Baring PE Asia (BPEA) and EQT Asia.
EQT announced on Friday that BPEA EQT has agreed to acquire a controlling stake in Udaipur-headquartered Indira IVF from TA Associates and the company’s founders —Ajay Murdia, Kshitiz Murdia and Nitiz Murdia, who will retain a significant minority stake and also continue to lead the company.
Boston-based TA Associates owned a 47 per cent stake in Indira IVF. The promoters held 53 per cent.
Ajay Murdia had founded Indira IVF in 1988. Since then, it has scaled from a single clinic to a pan-Indian network of 116 centres across 20 states.
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It is the market leader within assisted reproductive technology (ART) services in India and completes about 40,000 IVF cycles annually. It also ranks among the top-five players globally.
To date, Indira IVF has successfully supported over 125,000 couples in their journey towards achieving pregnancy.
“Fertility services and reproductive health are fast-growing opportunities in India and Indira IVF is a pioneer in this space.We see strong potential in further expanding Indira IVF’s presence across India and entering adjacent markets. We continue to invest in its R&D capabilities and technology, drawing on EQT’s in-house expertise within healthcare and digitalisation,” said Ashish Agrawal, partner at BPEA EQT.
Kshitiz Murdia, CEO of Indira IVF, said the partnership with BPEA EQT is the beginning of a new phase.
Indira IVF chain of fertility clinics now enjoys a 16-17 per cent share of the IVF market in India. Indira IVF is eyeing a 20-25 per cent growth.
It posted a turnover of Rs 1,205 crore for FY23, with an
earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin of 30-35 per cent.
Each IVF cycle costs around Rs. 1.7-2 lakh, and another Rs. 1-1.5 lakh is needed during the nine-month pregnancy.
India is one of the fastest-growing markets globally for ART services and is significantly under penetrated compared to more developed markets.
Infertility rates in India are estimated to be around 15 per cent.
They are expected to rise, driven by lifestyle changes, such as poor diet, high stress levels, and pollution.
Today, India completes around 300,000 IVF cycles annually, and over the next decade, the number is expected to grow at a compound annual growth rate (CAGR) of 15 per cent.
This trend is supported by rising awareness about infertility treatments, declining fertility rates, and increasing marriage age.
The growing market for fertility clinics in the country is likely to witness some consolidation. This comes as the Centre is trying to regulate this fast-growing sector, which is becoming the ‘new diabetes’ in India.
ART and surrogacy laws have been introduced to regulate the practices in India by registering the clinics performing such treatments. It is also to stop the commercialisation of donors and surrogates in India.
According to the law, these clinics need to adhere to certain requirements for being recognised as legal entities.
M&A activities are set to increase, feel industry, and more partnerships between organised players and mom-and-pop shops are in store.
From 2018 till date, the sector has already seen investments of $318 million from leading PEs and VCs, shows data from Venture Intelligence.
The organised sector, which now has a 17-18 per cent share of the Rs. 6,000-7,000-crore market, is growing faster at 15-20 per cent. The overall industry — which comprises single-doctor clinics, unorganised players apart from organised chains — is growing at 12-15 per cent.
Jimmy Mahtani, partner and co-head of BPEA EQT India, said, “This investment aligns with EQT’s commitment to investing in companies that address critical societal needs and have the potential to impact people’s lives for the better.”
BPEA EQT was advised by JSA (legal), Lincoln International, Price Waterhouse & Co LLP (transaction and tax, operational DD), Deloitte (financial and tax DD, structuring, ESG), and Awelin (digital). The selling shareholders were advised by Goldman Sachs and JP Morgan.
With this transaction, BPEA Private Equity Fund VIII is expected to be 35-40 per cent invested. This includes closed and/or signed investments and announced public offers, if applicable.