Aster DM Healthcare has received board approval to merge with Quality Care India Limited (QCIL), backed by Blackstone, in a move to create one of India’s top 3 hospital chains. The combined entity, with over 10,360 beds, aims to leverage synergies and expand its presence across South and Central India. The merger is expected to be EPS accretive from its first full year of operations.
Merger Overview
Aster DM Healthcare has approved a merger with Quality Care India Limited (QCIL), creating Aster DM Quality Care Limited. Aster acquired a 5.0% stake in QCIL from Blackstone and TPG, followed by the merger. This move unites QCIL’s strength and Aster’s brand in one of the largest M&A deals in the hospital industry.
Strategic Rationale
The combined entity aims for several strategic advantages:
- Scale: Becoming one of the top 3 hospital chains in India.
- Diversification: Broadening geographic presence across South and Central India with minimal city overlap.
- Growth Potential: Leveraging in-built growth potential with established hospitals, allowing for brownfield and greenfield expansions.
Financial Details
The transaction values Aster at 36.6x FY24 adjusted EBITDA, higher than QCIL’s 25.2x. Key proforma numbers for H1FY26 are:
- Revenue: INR 4,546 Cr
- Operating EBITDA: INR 993 Cr
Leadership and Governance
Dr. Azad Moopen will continue as Executive Chairman. Promoters and Blackstone will have equal representation on the board. The merger is expected to be completed by Q1 FY27, subject to approvals.
Operational Highlights
The merged entity will have a robust operational presence, with:
- 38 Hospitals
- 10,360+ Beds
- 27 Cities Presence
Kerala Cluster Performance
Kerala cluster achieved sequential performance in Q2FY26, with revenue increasing to INR 620 Cr. MVT business has shown improvement and the hospital had one of its highest revenue and operating EBITDA in a quarter.
Karnataka & Maharashtra Cluster
This cluster delivered INR 405 Cr in revenue, 10% YoY. The revenue was attributed to strong support from Aster Whitefield and an increase in high-value procedures.
Andhra & Telangana Cluster
The revenue grew 8% YoY with improvements seen across IP and ARPP. The revenue clocked in at INR 135 Cr. Occupancy grew for the period and the management also increased its stake in Aster Ramesh Hospitals.
ESG Initiatives
Aster DM Healthcare achieved significant milestones in environmental, social, and governance (ESG) initiatives: ~577 ton of waste reduction, ~7,414 KL in water reduction, sourcing 97%+ energy via renewable resources, with over 7,000+ patients benefitting from economical and free healthcare.
Source: BSE