ICICI Venture to raise healthcare corpus, buy into more hospitals

Leading private equity (PE) firm ICICI Venture is betting big on the country’s healthcare sector by expanding I-Ven Medicare, a USD 250 million fund set up as the lead vehicle for the former’s investments and buyouts in the healthcare sector. I-Ven Medicare, which has already acquired majority stakes in four hospitals across the country, is planning to augment the portfolio to 18-20 hospitals by acquiring major stakes in more, in a span of 12-18 months. I-Ven Medicare is a part of ICICI Venture’s USD 840-million India Advantage Fund, series II. It operates through four nodes – Pune, Mysore, Kolkata and Delhi, and has so far committed INR 250 crore for acquiring stakes as well as expansion of the four hospitals this year. The healthcare sector in India is estimated to be worth USD 40 billion by 2012, making it a lucrative investment opportunity for PE funds. Arun Natarajan, CEO, Venture Intelligence, says, “Compared to investments in pharma firms for the last couple of years, hospitals and diagnostic services are the much sought after sectors for PE players. Changes in lifestyle and health insurance penetration are the major reasons for this shift.” According to data from Venture Intelligence, PE firms have invested USD 538 million across 33 deals in the healthcare and pharma sector till September 2008, compared to USD 505 million invested across 34 deals for the whole year 2007. Rajeev Bakshi, joint managing director, ICICI Venture, told FE, “We have committed the expansion for INR 250 crore. We aim at a capacity of 2,000 beds under I-Ven Medicare by March 2009. We have investments in four hospitals and further buyouts will take place through them. The number of hospitals to be acquired has not been decided yet.” The investments in the four hospitals include USD 36 million in Pune-based Sahyadri Hospital, USD 24 million in Mysore-based Vikram Hospital, USD 16.25 million in Kolkata-based Medica Synergy (Kolkata) and USD 10.25 million in Delhi-based RG Stone Urological Research Institute. Similarly, US-based Global Healthcare Investments and Solutions had declared a USD 500-million fund to invest in the Indian healthcare sector. The Ajay Piramal Group had also launched a USD 200 million PE fund dedicated to healthcare. UK-based PE firm Bluewater International Investment is also learnt to have an investment plan of INR 500 crore in India to set up hospitals.


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