Singapore’s Temasek Holdings is close to buying Peak XV’s 18-20% stake in Bengaluru-based Cloudnine Hospitals for around $125 million, three people aware of the development said.
The deal, which has been in the works for more than a year and a half, may value the specialist mother and baby care hospital at around $600 million, the people cited above said on the condition of anonymity. It will also mark Peak XV’s exit from the company after 11 years—In 2013, Cloudnine had raised $16 million in a round led by Peak XV, then called Sequoia Capital.
Temasek’s $600 million stake purchase includes a small primary round that happened earlier this year, as well as the upcoming share purchase from Peak XV, one of the two people cited above said. Cloudnine is realigning its cap table ahead of a public listing expected next year, the person added.
This would be Cloudnine’s second attempt at an initial public offering (IPO). In 2022, the company had filed draft papers for a ₹1,200 crore IPO.
“Cloudnine does not need fresh capital; this is more like a pre-IPO round,” the second person added. In the March quarter, the company raised ₹359 crore from Temasek and TPG Newquest in a primary round.
Peak XV and Temasek spokespersons declined to comment. Queries sent to a company spokesperson remained unanswered.
Revenue growing
An Icra report in April said Cloudnine’s consolidated revenue grew 26.3% to ₹946.7 crore during the first nine months of FY24.
“On a standalone basis, the company’s revenues stood at ₹837.2 crore during 9M FY2024. The company’s operating margins stood at 13.8% in 9M FY2024 against 14.3% in FY2023 on account of losses from new centres opened in Q4 FY2023 and 9M FY2024. Going forward, the margins are expected to moderate in FY2025 due to OPBDITA losses from new centres that commenced in FY2024 and new centres that are expected to commence operations from FY2025,” it said.
Founded in 2006 by Dr. R Kishore Kumar, Rohit M.A., M. Ramachandra and Vidya Kumar, Cloudnine is a chain of super-specialty hospitals catering to mother and baby care, including fertility, maternity care, gynaecology, paediatrics, neonatology, baby care and stem cell banking. Currently, it has 34 centres across India in locations including Bengaluru, Delhi, Mumbai, Pune, Chennai, Gurgaon, Ludhiana and Chandigarh. Twelve of the centres are in Bengaluru.
Capex plans
Cloudnine plans to set up more units across metros and tier I cities, the Icra release said. “The company has capex plans to incur capex of approximately ₹280-300 crore in FY2025.”
Cloudnine competes with hospital chains such as Motherhood, Indira IVF, Apollo Cradle and LifeSpring in a growing motherhood and childcare healthcare market.
According to a Pew Research report in xx month/year, Indiais estimated to have more than 1.4 billion people – greater than the population of Europe (744 million) or the Americas (1.04 billion). China, too, has more than 1.4 billion people, but whileChina’s population is declining, India’s continues to grow. In this backdrop, mother and child healthcare market is expected to grow at a faster clip as Indians spend more on health and wellbeing.
Source: Mint