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Aster DM Healthcare considers hiving off Gulf, India health care units

Aster DM Healthcare Ltd., a health care chain operating across the Gulf and India, is mulling a split of its geographical arms to simplify the firm’s business structure.

The Dubai-based company that runs 27 hospitals is in discussions with consultants and investment bankers to look at a potential demerger, Chairman Azad Moopen said in an interview on Friday. He acknowledged that some analysts and investors were calling for the move to “unlock the value.”

Aster has focused increasingly on expansion in India and plans to add hundreds of hospital beds in the South Asian nation. While it has over half its hospitals in India, the local market accounted for just under a quarter of its revenue for the six months to Sept. 30. This spurred some analysts to query the rationale of a keeping these two regional arms under one entity as the chain ramps up expenditure in India.

“India is not giving that value to the GCC business, it’s giving discount to the GCC business,” Moopen said. “We would like this to be seen separately, so that is something we are looking at.”

Moopen said one of the options on the table would be listing the Gulf arm in India as a seperate unit. Another route would be to take one of the entities completely private, said Aster’s Chief Financial Officer Sreenath Reddy, who added that a decision was likely within the next three months.

Aster has so far held back on earlier plans to go ahead with a roughly $400 million bond sale. Reddy said the bond issue is still possible and the call will be made in the next couple of months on “whether it would be beneficial.”

More stories like this are available on bloomberg.com

©2021 Bloomberg L.P.

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