News reports on 25 November said that the publishers of Amar Ujala one of the leading Hindi dailies with centers in numerous cities in North India has acquired a majority stake in Cygnus Medicare (CM), a chain of super-specialty hospitals, for around Rs 130 crore. The investment is seen as a part of its expansion plans in the healthcare segment. Amar Ujala already owns two hospitals, and Cygnus Medicare has more than 1,000 beds across its ten super specialty hospitals in Delhi and Haryana.
The Indian healthcare sector is expected to reach Rs 19,56,920 crore (US$ 280 billion) by 2020, according to the Indian Healthcare Industry Report by India Brand Equity Foundation (IBEF). With rising income levels, health awareness, and access to insurance are among the prominent contributors to health industry growth.
The sector is expected to generate 40 million jobs in India by 2030, and the government’s Ayushman Bharat National Health Protection project is expected to create 100,000 jobs. The IBEF report shows that the hospital industry in India stood at Rs 4 lakh crore (US$ 61.79 billion) in FY17 and is expected to reach Rs 8,60,000 crore (US$ 132.84 billion) by FY22.
“We have concluded a deal of around Rs 130 crore with Cygnus Medicare to take over their ten hospitals and added our two hospitals in the overall portfolio,” Probal Ghosal, director, Amar Ujala, said to the Press Trust of India (PTI). The firm has acquired a majority share in Cygnus Medicare with management control, he added. Ghosal also clarified that the source of funds for the acquisition is from Amar Ujala’s internal accruals.
The investment of Rs 130 crore includes a significant primary commitment, with the merger of the two Ujala Healthcare hospitals as well as a secondary investment, which provides an exit to angel investors and a partial exit to existing institutional investors, Amar Ujala.
Amar Ujala, through its healthcare arm, will hold a significant stake in the merged entity, along with management control. The balance stake will be held by Eight Roads Ventures, Somerset Indus, Evolvence India, and the previous promoters – Dinesh Batra and Shuchin Bajaj. Batra and Bajaj will become board members of the merged entity and continue in their earlier roles, whereas Ghosal will become its chairman.