Dr Moopen's Aster to merge with CARE Hospitals this month

Bengaluru-headquartered Aster DM Healthcare and Hyderabad-based CARE Hospitals are reportedly set to merge, a move that could lead to the formation of a significant new player in India’s healthcare sector. According ET, the merger is expected to be finalised this month, with the combined entity to be named Aster DM Quality Care. Upon completion, the new company could become the second-largest listed hospital chain in India, although details of the final structure are still pending.

Largest shareholder 

The merger is expected to involve the swapping of shares at a 1:1 ratio, with the application for approval already submitted to the National Company Law Tribunal. According to reports, Blackstone, which currently holds a 79% stake in Quality Care India, the Indian arm of CARE Hospitals, will become the largest shareholder of the post-merger entity. Meanwhile, TPG, which acquired a controlling stake in CARE Hospitals from Rice Funds in May 2023, will hold a 11% share.

Aster DM Healthcare’s promoter group, led by Dr. Azad Moopen, is set to retain a controlling stake in the newly-formed company. Dr. Moopan, who is the chairman of Aster DM Healthcare, is also expected to continue as the chairman of *Aster DM Quality Care*. His family is reported to hold a 23% stake in the combined entity.

Indian-international expansion

The merged company is expected to operate 38 hospitals with a total of around 10,000 beds by FY2025, though this remains speculative. At present, CARE Hospitals and KIM's Kerala Hospitals are functioning under the banner of Quality Care. The new company will likely focus on expanding its presence both in India and potentially in other international markets.
 
The merger is seen as a significant development for the Indian healthcare sector. If finalised, the combined entity would be positioned to play a major role in the country’s growing healthcare market, particularly in light of the ongoing changes and consolidation within the industry. The move is expected to strengthen Aster DM Healthcare’s position in India, following the divestment of its Gulf business earlier this year.

While the merger is expected to create a more robust company, the final impact on the market and healthcare services will depend on various factors, including regulatory approvals and the successful integration of the two entities. The emerging company will likely face competition from other large hospital chains in India, while also exploring opportunities for growth across different healthcare segments.