Aster DM Healthcare completes separation of India and Gulf businesses, shares close 2% higher

Aster DM Healthcare Ltd has completed the process for separation of its businesses in India and the Gulf Cooperation Council (GCC) region.

In a filing to the stock exchanges, the leading healthcare services provider announced on Wednesday, April 3, that the separation process of its India and GCC businesses has now been concluded in order to establish two different and standalone regional healthcare champions.

As per the separation plan, a sovereign-owned private equity firm based in the United Arab Emirates, a consortium of investors led by Fajr Capital, has acquired a stake of 65% in Aster DM Healthcare’s GCC businesses. The Moopen family has retained a 35% stake in the company, in addition to management as well as operational rights.

The company’s shareholders gave their approval to the said separation plan earlier this year in January 2024, while the Board approved the proposal in November 2023.

The Moopen family still owns a 41.88% stake in Aster DM’s India business, continuing the leading role in managing and operating the company’s Indian operations.

As the transaction has now come to an end, the wholly owned subsidiary of the company, Affinity Holdings Limited has received a cash consideration of $907.6 million.

Dr Azad Moopen, the founder Chairman of Aster DM Healthcare will continue in his role while Alisha Moopen will remain a director on the Board. She will also serve as the Managing Director and Group CEO of Aster’s GCC business.

Following the segregation, Aster DM Healthcare India will focus upon growing its geographical expanse with greenfield and brownfield expansions over the next three years.

As per the company’s plans, it will add 1,700 beds by the financial year 2027 (FY27) organically, while also looking to expand through inorganic routes. The company looks to place itself among the top three hospital chains in India.

Aster DM Healthcare has also stated that it intends to consider distributing about 70-80% of the proceeds received from the transaction as dividends to its shareholders, the range of which comes at ₹110 to ₹120 per equity share. It expects to distribute these dividends on receiving the necessary approvals.

“The rationale behind taking the bold and strategic decision to separate the India and GCC entities was to establish fair value to both entities and to unlock long-term investor value. The current Indian healthcare market looks promising and post segregation, our efforts will be to dynamically increase our footprint in India,” said the Founder and Chairman of Aster DM Healthcare, Dr Azad Moopen, on April 3, 2024.

Shares of Aster DM Healthcare Ltd closed 1.92% higher at ₹417.75 apiece on the NSE.