Aster DM Healthcare on Friday announced its merger with Blackstone- and TPG-backed Quality Care India (QCIL), bolstering its position as one of the top three hospital chains – along with Apollo Hospitals and Manipal Hospitals – in terms of network size and revenue. The merger is expected to close by the third quarter of FY26.
In a regulatory filing, Aster DM Healthcare said it will acquire 19 million equity shares of QCIL from Blackstone and Centella Mauritius at Rs 445.8 per share. Aster will issue 18.6 million of its own shares to QCIL’s shareholders at Rs 456.33 per share.
Currently, Aster DM Healthcare, founded by Dr Azad Moopen, operates 19 hospitals with 4,994 beds. QCIL, which owns Hyderabad-based Care Hospitals, Kerala-based KIMS and Evercare brands, has over 5,150 operating beds. Post merger, Aster DM Healthcare will be rebranded as Aster DM Quality Care, encompassing four brands—Aster DM, Care Hospitals, KIMSHEALTH and Evercare—with a combined network of 38 hospitals and over 10,150 beds across 27 cities.
“The merger is expected to result in significant strengths, including scale, diversification, enhanced financial metrics, synergies, increased growth potential and backing from marquee PE investors,” Aster DM Healthcare said.
The company also said the merger opens up opportunities for both brownfield and greenfield expansion, with plans for 3,500 new beds planned between FY24 and FY27.
Aster is valued at a multiple of 36.6x on FY24 adjusted post IND AS EV/Ebitda, while QCIL is valued at a multiple of 25.2x based on FY24 adjusted post IND AS EV/Ebitda.
Under the agreed swap ratio, Aster shareholders will hold 57.3% and QCIL shareholders 42.7% in the merged entity. The entity will be jointly controlled by Aster promoters and Blackstone, holding 24% and 30.7%, respectively. Azad Moopen will continue as executive chairman of the merged entity, while Varun Khanna, group MD of QCIL, will serve as the MD and Group CEO of the newly-formed Aster DM Quality Care.
“The new combined entity, Aster DM Quality Care, is poised to become one of the largest healthcare players in the industry, setting new benchmarks in patient-centric care, innovation and accessibility,” said Azad Moopen, founder and chairman of Aster DM Healthcare.
Ahead of the merger, Aster will acquire a 5% stake in QCIL from Blackstone and TPG through a primary share issuance for a 3.6% stake under ‘initial share acquisition’. Following this, QCIL will be merged into Aster via a scheme of amalgamation. The transaction is subject to shareholder and regulatory approvals.
Aster also said it will relocate its registered office from Karnataka to Telangana.
Meanwhile, shares of Aster DM Healthcare closed 2% higher on the NSE at Rs 500.55.
