Temasek Holdings is in talks with several sovereign funds, including Abu Dhabi’s Mubadala Investment Co. and Brunei Investment Agency, to pare its stake in Manipal Health Enterprises Ltd to de-risk its holdings, two people aware of the development said.
Singapore state investor Temasek currently holds around 59% stake in Manipal Health. It is, however, keen to retain a majority—or more than 51% stake—in the company, the two people cited above said, requesting anonymity.
Additional investors might join a special purpose vehicle, structured as a ‘back-end’ investment arrangement for Temasek, one of the two people said. The arrangement could resemble a co-investment deal where Temasek represents other investors on the capital table, with the possibility of bringing in additional investors, according to the person.
“Temasek is concerned about their high exposure, which they want to reduce,” the person added.
Reuters first reported Mubadala’s talks with Temasek Holdings for a stake in Manipal Hospitals on Wednesday.
The deal is being negotiated at a valuation of around $5 billion.
In April, Sheares Healthcare, a unit of Temasek, agreed to buy a controlling stake in Manipal Health Enterprises, raising its ownership from 18% to close to 59% for about ₹16,400 crore in one of the largest hospital deals in India.
At the time, investor TPG sold half of its stake while India’s National Investment and Infrastructure Fund sold its entire 8% stake, valuing Manipal at around ₹40,000 crore ($4.88 billion). Manipal Education and Medical Group Pvt. Ltd retains around 31% of the company, with TPG holding around 10-11%.
A spokesperson for Temasek declined to comment, while Manipal Hospitals, Mubadala and Brunei Investment Agency did not respond to requests for comments.
Since the transaction was struck in April, Manipal has acquired another asset, which is expected to add ₹1,000 crore to its revenue in FY24. Last week, Manipal Health announced it had acquired an 84% stake in Emami Group’s Amri Hospitals for around ₹2,300 crore in a deal that would also see the hospital chain taking on Amri’s debt on its books. Manipal reported total revenue of around ₹4,500 crore for FY23.
Mubadala is a sovereign investor that manages money on behalf of the government of Abu Dhabi, while Brunei Investment Agency is the sovereign wealth fund of the government of Brunei.