It was recently that Aster DM Healthcare confirmed that it was evaluating proposals for a possible stake sale. The company remains one of the biggest hospital and clinic operators in the UAE. Image Credit: Ahmed Ramzan/Gulf News

Dubai: Aster DM Healthcare - one of the biggest hospital operators in the UAE - plans to raise more than $1 billion by selling a stake in the Gulf operations, according to a statement. The step is being taken as the company splits its Gulf and India operations.

Aster also has a sizeable presence in India, especially in the southern states where it operates multi-speciality hospitals. It is also one of the biggest employers in the healthcare sector.

Recently, the company spoke about evaluating a possible stake sale of its Gulf operations and looking at ways to build up its India operations as a standalone unit.

The stake sale - to Fajr Capital - is subject to shareholder approval in India, regulatory compliances and other customary conditions to closing. Aster expects the transaction to close by March 2024.

Dr. Azad Moopen to remain Chairman
Dr. Azad Moopen will continue as Chairman and oversee India’s and GCC’s businesses.

Alisha Moopen will be the GCC business’s new Managing Director and Group CEO.

Dr Nitish Shetty will continue as the CEO of the Aster businesses in India.

Who bought the Aster stake?

Alpha GCC Holdings Ltd. is the buyer entity. It will be owned by the promoters of Aster India (which includes Dr. Azad Moopen, the founder) and funds managed by Fajr Capital Advisors.

The former will have 35 per cent, and Fajr Capital Advisors will have the rest.

There had been other bidders who were interested in taking a majority stake in the Aster Gulf enterprise. “The promoters (i.e., Dr Moopen and family) ‘have expressed their interest in continuing to participate in the GCC business’.

“The promoters have expressed their deep commitment to both the India and GCC geographies and shall continue to have a meaningful role both in GCC and India following the completion of the transaction,” the statement added.

35 %

What Aster's promoter group - Dr. Azad Moopen and family - will hold in the company after the stake sale in the GCC business. In the India operations, which is listed on the BSE, the shareholding will be 42%

Split will help with better focus 

According to Dr. Moopen, “The strategic decision to segregate the India and GCC operations was based on the rationale to establish fair value for both entities, creating two pure-play geographically focused entities that are able to leverage the growth opportunities in their respective markets.

"In India, we as promoters, remain committed to our growth plans and hence had increased our stake to 42 per cent earlier this year.

"Major institutional shareholders continue to remain invested, reflecting overall confidence in the company’s India business model and go-to-market strategy spanning all segments of the healthcare space.”

Dr. Azad Moopen terms the stake sale as setting up a strategic split of Aster's UAE-GCC and India operations. Image Credit: Supplied

More Gulf possibilities

Apart from the UAE, Aster DM has a sizeable presence in Oman and Qatar. Visibility in Saudi Arabia will be the next big thing, for obvious reasons. “While the India business of Aster DM Healthcare has made steady progress in growing multi-fold within a short period of time, the segregation will enable our GCC operations to seize a significant opportunity to unlock value," said Alisha Moopen, newly confirmed as Managing Director of the Aster GCC network.

That sets the stage to 'diversify revenue through targeting different economic segments, while expanding into tertiary care and digital health'. 

Aster India's medium-term targets
The separation will offer 'Aster India an opportunity to potentially expand its institutional investor base'.

Existing - and future - shareholders in the India business will benefit from 'better reporting of operating and financial parameters for the listed entity'.