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Hospital chain Aster DM Healthcare to divest stake in Gulf business to Fajr Capital for $1 billion

by John R. Fischer, Senior Reporter | December 01, 2023
Business Affairs
Aster Medcity (Photo courtesy of Aster DM Healthcare)
Aster DM Healthcare, a chain of 32 hospitals, 127 clinics, and 521 pharmacies spread across India and the United Arab Emirates, is selling a majority stake in its Gulf business to private equity firm Fajr Capital for $1 billion, as part of a long-term plan to expand its operations in the Indian market.

The company will transfer a 65% stake to Fajr, ending a year-long struggle to find a buyer due to the business being undervalued by some of its investors, in Aster’s opinion, according to Reuters. Aster promoter, Moopen Family, will hold the remaining stake in the unit.

News of the sale sent Aster’s share price soaring by 14% to a new 52-week high on November 29, reported Indian financial news outlet Mint. Reuters said that its shares closed down 1.48%, at a combined value of about $2 billion.

Alisha Moopen, managing director of Aster's Gulf business, told Reuters that the sale will allow the company to focus on expanding further in India. "I think there are a lot of opportunities for inorganic growth in India, which we haven't been able to pursue so actively because of these conflicting requirements and investment in capital requirements between the two regions.”

Other investors include UAE sovereign wealth fund Emirates Investment Authority, Al Dhow Holding Co, Wafra International Investment Co., and Saudi Arabian billionaire Olayan family's Hana Investment.

Aster and Fajr confirmed they were in talks of a sale back in July, with Fajr preparing by putting together a consortium of other investors, reported Reuters.

Aster also plans to sell a 30% stake in its India business for about $300 million as part of its expansion plans.

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