Ajay Piramal Group’s healthcare private equity fund is holding discussions to pick up a sizable stake in Trichy-based Kaveri Medical Centre (KMC), a 400-bed hospital, for around INR 100 crore, according to sources. KMC has been looking to rope in a financial partner for an aggressive expansion plan, which would give it a network of 1,000 beds across Tier-II cities in the south over the next three years. Last year, the Piramals, along with former SBI chairman AK Purwar, floated a USD 200-million healthcare fund for providing growth capital to hospitals, specialty clinics, medical equipment makers and healthcare BPOs. The deal with KMC could mark the Piramal fund’s first M&A in the hospital space, and comes at a time when several private equity players are holding back investments in the face of a sharp fall in hospital valuations. When contacted, Ajay Piramal declined to comment on the deal. KMC managing director S Chandrakumar said nothing has been finalised on the company’s fund raising plans, while its utive director S Manivannan said talks were on with more than one player. It was last year that KMC nearly doubled its bed count following the acquisition of the cross-town rival Sea Horse Hospital, a public-listed enterprise. At the time of making the announcement, Dr Chandrakumar said KMC’s vision was to have a network of secondary care hospitals in smaller towns, while making Trichy its base and referral tertiary care hospital. Besides being a financial investor in a Tier-II healthcare story, the deal also makes sense for Piramals as it gives a substantial platform for the group’s diagnostic services, Wellspring, spread across 57 locations currently. Wellspring already has its network in metros as well as Tier-II centres like Indore and Ajmer. KMC’s expansion plans, for which it is raising between INR 75 and INR 100 crore, also include having a number of primary care centres partnering with the existing medical practitioners around the referral hospitals.

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