Novo Holdings, Axight, and GIC are in advanced talks to invest ₹2,000-2,500 crore in Hyderabad-based AIG Hospitals. EQT plans a fund-to-fund transfer of its investment, involving a 10-12% stake dilution. Promoters Duvvur Nageshwar Reddy and Penmetsa Venkata Subbaraju will continue to run the company as they seek new strategic partners.

Novo Holdings, controlling shareholder of Danish drugmaker Novo Nordisk, Abu Dhabi's Axight and sovereign wealth fund GIC of Singapore are in advanced discussions with EQT to invest ₹2,000-2,500 crore in AIG Hospitals, a multi-speciality chain based in Hyderabad, said people with knowledge of the matter. Swedish buyout group EQT plans a fund-to-fund transfer of its four-year old investment, they said.

The investor interest comes amid private equity firms, including Blackstone and KKR, acquiring stakes in Indian hospitals, replicating a strategy they have followed in other countries for decades.

The sale plan is led by the chain's promoters, chairman and MD Duvvur Nageshwar Reddy and vice-chair Penmetsa Venkata Subbaraju. It will involve 10-12% dilution of their shares at a valuation ₹22,000-24,000 crore ($2.29-2.5 billion).

The AIG Hospitals investment took place in 2022 via Baring Private Equity Asia (BPEA) Private Equity Fund VII.

In October 2022, BPEA combined with EQT to form BPEA EQT, later renamed EQT. BPEA had bought out Quadria Capital and invested $300-350 million for a near 40% stake in the hospital chain. The remaining 60% is held by the two founders, Reddy and Subbaraju.

EQT and the founders have been working with advisers Goldman Sachs and UBS to help find new investors and facilitate the transfer. The plan has been to approach EQT's limited partners (LPs) to co-invest with them, as well as healthcare-focused funds that can add strategic value. The two founders will continue to run the company.

Fund-to-fund strategies are increasingly becoming prevalent in the PE industry as they hold on to prized and hard-to-sell assets for longer.

EQT, Novo and GIC declined to comment. Axight didn't respond to queries. Reddy couldn't be reached on his phone.

THE ASSET

AIG Hospitals was founded by Reddy in 1994 in Somajiguda, Hyderabad, as Asian Institute of Gastroenterology, India's first dedicated day-care centre for digestive disorders and specialized gastrointestinal care. AIG is present in more than 40 medical specialities operating across three units in Hyderabad with more than 1,400 beds and over 350 ICU beds.

Last month, while laying the foundation stone of a fourth greenfield facility in Visakhapatnam, Reddy said the company is planning to invest Rs 2,000 crore over the next five years to add 1,000 beds.

The company is expecting a FY27 ebitda of ₹800 crore but the transaction is based on its FY28 ebitda expectation of ₹1,000 crore.

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