INDIA – Aster DM Healthcare Ltd. (Aster) is looking to unlock greater value for its shareholders with the separation of its India and GCC businesses by the end of March 2024.
In a press release, Dr. Azad Moopen, Founder and Chairman of Aster DM Healthcare, said: “The strategic decision to segregate the India and GCC operations was based on the rationale to establish fair value for both entities.”
Dr. Azad Moopen further mentioned that the focal point of the strategic decision is to create two pure-play geographically-focused entities that are able to leverage the growth opportunities in their respective markets.
He reiterated the Moopen family’s commitment to Aster DM Healthcare Ltd.’s growth plans in India while lauding major institutional shareholders for remaining invested in the listed Indian entity.
Post completion of the separation plan, Dr. Azad Moopen will continue as the Founder and Chairman of Aster, in particular overseeing both India and GCC entities.
Aster has received board approvals from its subsidiary Affinity Holdings Private Limited (Affinity) and approval from its Board of Directors, marking a significant step in the separation process.
Splitting into two distinct and standalone entities
The separation plan will allow Aster to employ different business strategies to cater to the needs of the GCC and India healthcare markets, and in turn, support business growth for continued, sustainable success.
Additionally, the separation plan will unlock value for the shareholders by allowing both the India and GCC businesses to adopt a market-focused strategy and create sustained long-term growth.
The separation will also offer the Indian entity an opportunity to potentially expand its institutional investor base to include investors who are mandated to invest in India only or majority businesses.
By re-establishing its focus in target markets, shareholders of the India business will benefit from better reporting of operating and financial parameters for the listed entity.
Commenting on shareholders of the India business, Dr. Azad Moopen outlined: “Major institutional shareholders continue to remain invested, reflecting overall confidence in the Company’s India business model and go-to-market strategy spanning all segments of the healthcare space.”
Upon completion, the separation of Aster’s India and GCC businesses will establish two distinct regional healthcare champions.
The expansion of India operations
The two distinct and standalone entities are expected to benefit from the strategic and financial flexibility of Aster to focus on growing market demand and the priorities of patients in the focus markets.
The two distinct and standalone entities will also benefit from a dedicated investor base that will aid future growth in the Indian and GCC markets respectively.
As part of the separation plan, Affinity has entered into a definitive agreement with a consortium of investors led by Fajr Capital to invest in Aster’s GCC business.
“Together, we envision a future where Aster’s business in the GCC continues to deliver best-in-class healthcare services to its patients across the region, underpinned by Fajr Capital’s strong market presence and network,” stated Dr. Azad Moopen.
This separation plan comes as Aster DM Healthcare Ltd. is gearing up to ramp up bed capacity in India by almost one-third, by adding more than 1,500 beds by Fiscal Year 2027.
Aster bets big on the CEO
Upon successful completion, both the India and GCC entities will be operated by separate dedicated management teams.
The separation will also offer Aster India an opportunity to potentially expand its institutional investor base to include investors who are mandated to invest in India only or majority businesses.
The Indian entity will continue to be led by Dr. Nitish Shetty as Chief Executive Officer, with a focus on the growth of the Indian business in a move to create greater value for its shareholders.
For his part, Dr. Nitish Shetty, CEO of Aster DM Healthcare Ltd. in India, said: “The restructuring of Aster DM Healthcare provides the Indian balance sheet with the flexibility to align its capital allocation policies to emerging growth opportunities.”