Temasek to shed 8-9% in Manipal Hospitals to sovereign wealth funds

Temasek is paring its holding in Manipal Hospitals six months after it bought a controlling stake, but the Singapore sovereign wealth fund (SWF) will continue to hold 51% in the hospital chain, people aware of the development said.

Temasek-owned Sheares Health is in advanced negotiations to sell 8-9% in Manipal Health Enterprises to Abu Dhabi fund Mubadala and Brunei Investment Authority (BIA), another SWF, at an enterprise valuation of $5 billion, or about ₹40,000 crore, they said. The valuation is the same as when Temasek acquired an additional 41% to take its holding in the Bengaluru-headquartered hospital chain to 59%.

"Temasek is rebalancing the portfolio by taking some money off the table," said a person aware of the developments.


'Rebalancing Portfolio'
Also, bringing in these funds - that are also large LPs (limited partners) - "will help in future if large inorganic opportunities come by," said the person.

TPG holds an 11% stake in the hospital chain, while the founding promoters, the Pai family - that founded India's first privately owned medical college in Karnataka's Manipal town in 1953 - own 30%.

Ranjan Pai, chairman of Manipal Education and Medical Group, was unavailable for comment. Temasek declined to comment. Mails to Mubadala and BIA did not generate a response till press time on Thursday. Mubadala has so far invested about $4 billion in India, largely in telecom and retail companies owned by Reliance Industries and the renewable energy division of Tata Power. BIA has $73 billion of assets under management and has backed marque hospitality properties such as the Beverly Hill Hotels and Dorchester in London. Manipal Hospitals closed FY23 with a consolidated revenue of around ₹ 4,500 crore. According to India Ratings, its FY22 revenues stood at ₹ 4,016 crore, with an Ebitda of ₹ 971 crore.

Leader in Healthcare

With a series of acquisitions, Manipal has emerged as India's second-largest healthcare provider in terms of bed capacity. Last week, it acquired 84% in Kolkata-based AMRI Hospitals from Emami Group at an enterprise value of ₹2,400 crore. It is funding the acquisition through internal accruals and borrowings. The deal gave Manipal a strong footprint in eastern India, though it relies on the south for the bulk of its revenues. Manipal will now have a network of 33 hospitals across 17 cities with 9,500 beds, over 5,000 doctors and more than 20,000 employees. AMRI is Manipal's third acquisition in the last three years.

In 2020, it obtained the Indian assets of Columbia Asia Hospitals for around Rs 2,100 crore. In June 2021, it bought out Bengaluru-based Vikram Hospitals from Multiples Private Equity for around Rs 350 crore. Manipal group is also ramping up its greenfield assets across India, which will be ready by FY25. It has previously said it is likely to look at a public listing, though timelines have not been identified.

Following the sale to Temasek, the Pai family paid down debt of nearly $400 million to clean up its balance sheet and has been looking to spend the rest of the windfall across newer opportunities - using a newly-created family office called Claypond Capital and an alternative investment fund.