MUMBAI: In one of the largest healthcare deals in West Asia, Dubai-based Indian billionaire Dr Azad Moopen has acquired majority stake in Sanad hospital in Riyadh, Saudi Arabia, for INR 1,600 crore. Aster DM Healthcare, Moopen’s company, bought the additional 57% from a Saudi partner to up total stake to 97%. In December 2011, the company had acquired 40% in the hospital.
The deal closed after the necessary clearances from Saudi Arabian General Investment Authority (SAGIA), the body that takes foreign investment related decisions in the kingdom, came through in September.
“The Kingdom of Saudi Arabia allows 100 per cent foreign investment in hospitals, provided a player can prove that he will bring in capital and expertise. That offered a perfect opportunity for us to enter a big market where two-third of the nearly 30 million populations is local, unlike other Gulf countries where expats form a bulk of the population,” said Moopen.
With the latest acquisition, INR 4,200-crore Aster’s footprint in West Asia now extends to all six Gulf Cooperation Council (GCC) countries and Jordan. The healthcare company that operates through a portfolio of hospitals, clinics and pharmacies, has five green field projects underway in GCC countries, one hospital in Qatar and four in the United Arab Emirates.
Under the company’s two pronged growth approach, India, where the company runs eight hospitals, continues to be a focus market for Aster. The company has invested INR 550 crore in the recently inaugurated Aster Medcity in Kochi and is putting in nearly INR 230 crore in Aster CMI Hospital in Bengaluru. “In India, we see an opportunity in both mid and long term. Our focus will be to build a position of strength in South and West. And we also see medical tourism as an interesting opportunity,” said Moopen.
At Aster Medcity Kochi, medical value tourism already accounts for about 17 per cent of revenues.
The company, which first started India operations in 2001, currently runs three hospitals in Kerala (Calicut, Kottakal, Kochi), two in Maharashtra (Pune, Kolhapur), two in Telangana (Hyderabad) and one in Karnataka (Bengaluru). “In India and abroad, we like to follow a model that involves taking a majority stake in hospitals but the existing doctor group also has a stake. It allows us accountability and also flexibility to do various things,” Moopen said. Currently, Aster has a bed capacity of 2,022 in India compared with 517 in GCC.
The company will also list the Indian arm in capital markets in the coming months. To fund its India growth, Aster has raised nearly $205 million in four tranches from private equity funds, India Value Fund and Olympus.
A Padma Shri awardee, Moopen belongs to the set of Malayali entrepreneurs like M. A. Yussuffali, Ravi Pillai, Sunny Varkey and PNC Menon who have struck gold in West Asia. Speaking of Prime Minister Narendra Modi’s recent visit to the UAE, Moopen said it will have long-term benefits for Indian businessmen.
“Prime Minister Modi’s visit helped position the India story well in this region. It was long overdue, after all Indians make up to 50 per cent of UAE population and India also remains a major trading partner with UAE,” he said.