Defers PE funding in healthcare; eyes Chaitanya Schools to bridge K-12 gap.
Bangalore-headquartered Manipal Education and Medical Group (MEMG) is upping the ante in its gameplan to further expand in its two main pillars of business.
The group, which runs India’s third largest hospital network, has put on hold its plans to raise '150 crore private equity from Kotak Capital and instead is understood to have decided to raise around '140 crore debt through an overseas unit of the State Bank of India. Senior officials in the private equity industry, requesting anonymity, said that Manipal Group is understood to be raising debt from the Mauritius-based arm of SBI at a 5 per cent interest. Manipal Group is expected to buy out an existing investor — IDFC Private Equity, through this infusion.
The healthcare arm — Manipal Health Systems — was on the verge of raising private equity from Kotak through a structured deal and according to PE players, this deal may happen as and when there is a fresh avenue for inorganic expansion for Manipal Group’s healthcare arm. The management of Manipal Health Systems could not be reached for comments.
Manipal Group’s healthcare business has a turnover of nearly '500 crore, and operates around 5,000 beds across a network of hospitals predominantly in South India. According to senior officials in the company, the group is looking to double the number of beds and the turnover over a period of 3-4 years, which may require multiple rounds of external funding.
Even as the healthcare arm is settling into a rhythm post the downturn which made the group defer plans for Mumbai and Delhi, the education arm has put the pedal to the metal while trying to have a presence in the KG-to-PG chain.
According to information available with private equity funds, Manipal Universal — the group’s flagship vehicle for education, is closing in on an acquisition in the K-12 segment, a gap in its portfolio. Senior officials in the PE industry told Business Standard that Manipal Universal had detailed discussions with Hyderabad-based Chaitanya Schools which has a network of around 80 schools. Manipal Universal has been straddling the various facets of graduation, post-graduation and vocational training, but has not been able to establish a presence in the K-12 segment, though it has an 11 per cent stake in TutorVista Global in this segment running under the Manipal K12 brand. According to information available, the enterprise value of Chaitanya Schools is around '100 crore.
“The intent is to own a business in this segment and it is essential that Manipal Universal gets into this prior to the planned public offer which is expected during the latter part of 2011,” a senior official in Manipal Group told Business Standard. Anand Sudarshan, MD&CEO, Manipal Universal, though, denied any such move by the company.
Manipal Universal recently raised '150 crore from Premji Invest, the $1 billion private equity fund owned by Wipro chairman Azim Premji, to expand its presence across India and in a few pockets of West Asia and the Caribbeans.
