A clutch of institutional investors, including development finance institutions and private equity funds, are in talks to invest in Cygnus Medicare Pvt. Ltd that operates hospital chain Ujala Cygnus Healthcare Services, two people in the know said.
The hospital operator is in talks with Proparco SA, MO Alternate Investment Advisors and Paragon Partners, among others, one of the people said seeking anonymity.
The firm is planning to raise ₹150-200 crore to provide exit to some of its backers.
An Ujala Cygnus spokesperson termed the development as “speculation”. Email queries to potential investors and EY did not elicit any answer till press time.
However, in an interview with The Economic Times on 22 December, a spokesperson of Ujala Cygnus confirmed the fundraising exercise and said the closure is expected by February 2023.
The company counts Eight Roads Ventures India, Evolvence India Fund and Somerset Indus Healthcare Fund among its institutional backers. Mint, however, could not immediately ascertain which of these investors were looking to exit their investments.
The company has appointed the investment banking arm of EY to scout for potential investors, the second person said also requesting anonymity.
The startup seeks to raise capital at a post-money valuation of at least ₹1,000 crore.
In November 2019, Eight Roads Ventures and Somerset Indus had made partial exits when Amar Ujala picked up a majority stake in the company.
Founded in 2011, Cygnus, operates 18 hospitals across 15 Tier-II and Tier-III cities in Haryana, Uttar Pradesh, Uttarakhand, Jammu & Kashmir and Delhi, and has over 300 doctors and medical experts, according to its website.
The hospital chain offers services across 30-plus verticals such as kidney and liver transplant, oncology, urology, gastroenterology, orthopaedics, nephrology, reconstructive surgery, diabetes, and so on, and claims to have catered to over 1 million patients till date.
The Indian healthcare sector has witnessed increased dealmaking activity recently. Last month, VCCircle reported that three homegrown funds were investing in the fundraising round of Sri Kavery Medical Care Pvt. Ltd, which runs the Kauvery Hospital chain.
In August, South India-focused in-vitro fertilization (IVF) chain Oasis Centre for Reproductive Medicine had raised $50 million in an equity round of funding from homegrown PE firm Kedaara Capital. while ASG Hospital and Dr Agarwal’s Health Care were the frontrunners to acquire International Finance Corp -backed eyecare chain Eye-Q Vision. In July, ASG had raised a ₹1,500-crore round led by General Atlantic and Kedaara Capital.
This came close on the heels of the ₹1,050 crore PE fundraise by Dr Agarwal’s in May. Both companies have lined up acquisition plans besides building on their organic growth strategy.
