Aster Healthcare Plans Expansion in India Through Private Equity Partnerships
Nitish Shetty, chief executive of Aster Healthcare India, disclosed the company”s plans to expand its operations in the northern and western regions of the country by exploring inorganic growth opportunities, including partnerships with some private equity players. This will bring the total bed count to more than 6,000, with the upcoming Aster Capital in Trivandrum with 350+ beds and Aster MIMS Kasargod with 200+ beds.
“Then we would be looking at adding bed capacity to our existing hospitals in Medicity, MIMS Kannur by about 100 beds each, and Aster Whitefield with 159 beds,” Shetty said.
“We find Maharashtra and Pune highly attractive, drawing parallels with our experience in Bengaluru. Pune offers a promising opportunity due to its similar geography and demographics,” said Shetty.
“While we have a modest presence in Hyderabad, there’s a desire to expand. UP (Uttar Pradesh), with its burgeoning market, is attractive, considering the recent trend of north-based groups venturing into the region,” he added.
Currently, Aster has registered its footholds in five states in the south through 19 hospitals, 13 clinics, 226 pharmacies, and 251 patient experience centres, including hospitals in Kochi, Kolhapur, Kozhikode, Kottakkal, Bengaluru, and Hyderabad.
“We’ve earmarked around 1,500 beds for our expansion plan over the next three years, a transparent commitment outlined in the public domain. This funding, which is a mix of brownfield and greenfield projects, fuels our growth strategy. With our present standing at 4,800 beds, an additional infusion of 1,500 beds for the next three years for which we have an outlay of Rs. 850–900 crore will ensure robust financial support,” said Shetty.
According to a report, private equity firm KKR & Co., Canadian pension fund Ontario Teachers’ Pension Plan (OTPP), and Blackstone-backed care hospitals have reportedly submitted non-binding term sheets to acquire a stake in Aster’s India business.
Moreover, the company”s subsidiary would be selling its stake in Aster DM Healthcare FZC to Alpha GCC for $1.01 billion, which would be used to fund the growth. Private equity player Olympus Capital, which holds a 19% stake in the company and has reportedly risen 15 times to cross Rs. 30,000 crore over four years from Rs. 1,921 crore in pre-covid 2019, is looking to sell its stake, a person close to the matter revealed.
“Whether through inorganic or organic means, our objective is to establish dominance in the industry. Our approach is agnostic, focusing on what aligns with our brand and serves the best interests of our business and stakeholders. We remain open to various partnership models and committed to choosing the path that is right for us,” Shetty said.
The company is also looking to expand its small hospital ventures, which will help it maintain a strong grip in Tier II and Tier III cities.
“We’re now exploring the possibility of scaling up from the asset-light model to regular hospitals, testing the market, and serving not just the local community but also expanding,” Shetty said.
He believes that this regional approach will allow Aster DM to thrive in tier-II and tier-III cities where others have faltered, leveraging its expertise and success in these regions. “With 70% of our business already thriving in tier-I, tier-II, and tier-III cities, Aster is uniquely positioned to roll out this model across more locations, offering a sustainable healthcare solution with proven success beyond metro areas,” he added.
