Homegrown private equity firm ChrysCapital is set to invest up to $100 million in New Delhi-based Centre for Sight for a “significant” minority stake, in a deal that will value the eyecare chain at $350-400 million.
As part of the transaction, ChrysCapital will purchase the entire stake held by Mahindra Holdings Ltd, a wholly owned subsidiary of Mahindra & Mahindra Ltd, in Center for Sight. Mahindra Holdings had invested in the eyecare chain in 2019.
ChrysCapital will route about 50% of the investment to Mahindra Holdings, leaving the remaining $50 million for Center for Sight, said Dr. Mahipal Sachdev, founder of the eyecare chain.
Post the transaction, ChrysCap will hold about a 40% stake in Center for Sight.
Center for Sight will use the investment from ChrysCapital to accelerate its expansion plans, particularly in India’s small cities and towns. It currently has 83 centres across the country.
“We will look to add 6-8 centers through greenfield and brownfield each year. The primary capital raised will be used for this expansion,” Sachdev said in an interview with Mint.
The investment underscores the growing interest of risk investors in single-specialty healthcare providers in the country. Overall, the broader eyecare industry has received investments of over $1.05 billion in the last couple of years.
“The healthcare sector in India is a key area focus for ChrysCapital given the significantly underserved market and the potential for share gain for organized players,” Raghav Ramdev, managing director, ChrysCapital, said in the statement.
An expansion and an IPO
Founded in 1996 by Dr. Mahipal S. Sachdev, Center for Sight has a strong presence particularly in North India, treating more than 1.5 million patients annually.
Organized healthcare chains such as Center for Sight are expected to gain market share from standalone clinics, and ChrysCapital sees an opportunity for the company to further scale through acquisitions in the next few years, the investment firm said.
ChrysCapital recently closed its largest ever continuation fund, at $700 million.
“We are a little shy of ₹500 crore in revenue for the current financial year and we will likely grow to ₹650 crore next year, with an Ebitda of around ₹150 crore,” Dr. Sachdev said.
A bulk of that growth, he said, would come from the eyecare chain’s existing network, while it adds more centers in western and northern states. “We are actively looking to add more centers in Gujarat and Maharashtra, where post-covid single doctor setups are now willing to sell to corporate chains,” Dr. Sachdev said.
Center for Sight plans an initial public offering of its shares over the next 3-4 years. “We would like to get to an Ebitda level of around ₹150-200 crore before going for a public listing,” Dr. Sachdev said.
The company had previously filed with Securities and Exchange Board of India in 2016-17 for an IPO but withdrew as the markets turned south.
