Aster DM rallies 10% as board to consider special dividend on April 12

Shares of Aster DM Healthcare hit a record high of Rs 499.90, as they rallied 10 per cent on the BSE in Monday’s intra-day trade after the company said its board will meet on Friday, April 12, 2024 to consider declaration of interim dividend and special dividend.

The company engaged in hospital business said the consideration of special dividend was on account of segregation of the GCC business through the sale of Affinity Holdings Pvt Ltd, a subsidiary of the company, conducting business in the GCC region to Alpha GCC Holdings Limited.

Aster DM has fixed April 23, 2024 as the ‘Record Date’ for determining entitlement of the shareholders to the interim dividend for the financial year 2023-24 and special dividend.

Meanwhile, in the past four trading days, the stock has appreciated by 22 per cent after Aster DM and GCC on April 3 announced the completion of the separation of its India and GCC businesses.

Under the separation plan, a consortium of investors led by Fajr Capital, a sovereign-backed private equity firm, have acquired a 65 per cent stake in Aster GCC, the company said in a statement. While the Moopen family retained a 35 per cent stake alongside management and operational rights, it added.

In the Indian operations, the Moopen family continues to hold 41.88 per cent stake, the healthcare firm stated.

"The transaction has now concluded, pursuant to which Affinity Holdings Ltd (a wholly-owned subsidiary of the company) has received a cash consideration of $907.6 million," the healthcare firm said.

The company intends to consider distributing 70-80 percent of the transaction proceeds as dividends to its shareholders in the range of Rs 110 to Rs 120 per share and anticipates distributing the dividend.

The management said the current Indian healthcare market looks promising and post segregation, the company’s efforts will be to dynamically increase footprint in India. Through both greenfield and brownfield opportunities, the company aims to take its total bed tally in India to over 6,600 beds in the coming 3 years and scale up labs and pharmacy business to emerge as the top 3 integrated healthcare providers in India.

The company plans to add 1700 beds by FY27 through the organic route and will further look for expansion through the inorganic route as well to be among the top 3 hospital chains in India.

The expansion plan will encompass a mix of brownfield and greenfield projects, encompassing the upcoming Aster Capital in Trivandrum, and Aster MIMS Kasargod and adding bed capacity to the existing hospitals. The company will also be looking at potential markets such as Maharashtra and Uttar Pradesh. The capital allocation for this expansion is in the range of Rs 1,000 crore.

Meanwhile, on March 27, 2024, the private equity firm Olympus Capital Asia had divested a 9.8 per cent stake in Aster DM Healthcare for Rs 1,978 crore through open market transactions.

Olympus Capital Asia through its two affiliates - Olympus Capital Asia Investments and Olympus ACF- offloaded the shares of Dubai-based Aster DM Healthcare on the bourses.

According to the bulk deal data available with the BSE, more than 44.26 million equity shares of Aster DM Healthcare were sold by Olympus Capital Asia Investments and 4.56 million shares by Olympus ACF.

As of December 2023, Olympus Capital Asia Investments owned an 18.96 per cent stake in Aster DM Healthcare, shareholding data showed.