Manipal Hospitals Secures INR 5,300 Cr for Sahyadri Acquisition

90% Funding for the acquisition is provided by the Global lenders including Deutsche Bank, Barclays, Japan’s MUFG and SMBC, and Singapore’s DBS Bank.

Manipal Hospitals, part of Mangalore-based Manipal Education and Medical Group (MEMG), is reportedly borrowing nearly INR 5,300 Cr from five foreign banks to fund its acquisition of Sahyadri Hospitals.

These bonds were subscribed to by foreign banks via Foreign Portfolio Investment entities based in Singapore.

As per reports, 90% funding for the acquisition is provided by the Global lenders including Deutsche Bank, Barclays, Japan’s MUFG and SMBC, and Singapore’s DBS Bank.

“The total deal size is around ₹5,900 crore, 90% of which is funded by debt raised from these foreign banks. The rest 10% has to be paid next fiscal year,” one of the persons aware of the details commented. “The debt is being funded by bonds issued by Manipal, maturing in two years at a yield of around 9.5%.”

FPI entities floated by these banks, most likely based out of Singapore, will subscribe to these bonds. Manipal will redeem these bonds in the next two years from the proceeds of its planned initial public offering (IPO).

Another person aware of the details said, “The banks will invest in these bonds through the foreign portfolio investment (FPI) route since the funds are raised to fund a foreign-owned company, and Reserve Bank of India (RBI) rules do not permit banks to lend onshore for mergers and acquisitions.”

Founded by Ranjan Pai in 2010, Manipal Health Enterprises operates over 30 hospitals across 19 Indian cities, with more than 9,500 beds and 5,000 doctors. Singapore’s Temasek owns 59% of Manipal, with promoter Ranjan Pai holding 30% and TPG holding the remaining 11%.

Last week, Temasek-backed Manipal Hospitals signed an agreement to acquire Pune-based Sahyadri Hospitals from Ontario Teachers' Pension Plan (OTPP).

The acquisition will make Manipal the largest private sector hospital chain in India, giving it 11 new hospitals across Pune, Nashik, Ahilya Nagar and Karad. Its total network will increase to 49 hospitals with a bed capacity of 12,000.

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