Between 2022 and 2024, India’s healthcare and pharma sector witnessed a surge in investor interest, with 594 M&A and private equity transactions worth over $30 billion, according to a report by Grant Thornton Bharat and the Association of Healthcare Providers of India (AHPI). Hospitals alone accounted for nearly 40 percent of these deals. Once seen as slow-moving and service-oriented, the hospital sector is now pulsing with investor energy, drawing billions from global private equity firms like Blackstone, Temasek, TPG, General Atlantic, and KKR.
Last November, Aster DM Healthcare signed a landmark merger agreement with Blackstone-backed Quality Care India, forming Aster DM Quality Care. The combined entity now ranks among India’s top three hospital chains, with 38 hospitals and over 10,366 beds across 27 cities.
In an exclusive email interaction with Forbes India, Dr Azad Moopen, executive chairman of Aster DM Healthcare, spoke about the strategic shifts following the merger, the role of private equity in shaping the company’s growth, and what lies ahead for the newly-formed healthcare giant. Edited excerpts:
Q: What strategic shifts has Aster DM Healthcare undergone since the merger with Blackstone-backed Quality Care India Ltd.?
Private equity has been a key driver in Aster’s growth journey. From starting with a single hospital in 2001, we’ve expanded to a network of 19 hospitals across India. This scale has been possible thanks to the strategic support and insights of our investors, which have helped us sharpen our operational focus and stay aligned with our long-term goal of building a patient-centric healthcare ecosystem.
With Blackstone’s global experience and our clinical depth, we’re looking to accelerate expansion, strengthen digital capabilities, and make care more accessible and future-ready.
We’ve committed Rs 2,500 crore to add over 2,600 beds across India, with Rs 350–400 crore already deployed. This includes 490+ beds in FY26, 1,050+ in FY27, and the rest beyond. Major additions are planned in Bengaluru (1,439 beds), Kerala (818 beds), and Hyderabad.
In Bengaluru, we’ve announced two multi-specialty hospitals—one with 430 beds and another with 500. In Kerala, we’re developing greenfield projects in Kasargod (264 beds) and Thiruvananthapuram (454 beds). A 300-bed women and children’s hospital is also planned in Hyderabad.
Q: Has the merger with Blackstone-led Quality Care India led to any changes in decision-making or organisational structure?
Yes, the merger has brought about meaningful changes in both governance and structure. On the decision-making front, we’re identifying areas where centralised governance can add value—especially in procurement and supply chain. The scale of the merged entity allows us to negotiate better supplier terms, reduce input costs, and improve margins. Operational integration will also strengthen clinical capabilities, leading to better patient outcomes and stronger financial performance.
We expect the merger to be completed by Q4 FY26, with synergies beginning to show from FY27. Over the next few years, we anticipate a 10–15 percent uplift in EBITDA, which underscores the strategic potential of this partnership.
Q. What have been the most tangible outcomes—financial or operational—since partnering with private equity investors?
Since partnering with private equity investors, Aster DM Healthcare has achieved measurable improvements across both financial and operational metrics. EBITDA margins in India have expanded by over 800 basis points in the last five years, supported by revenue growth at a CAGR of 20 percent. Our return on capital employed has strengthened, reflecting more disciplined financial governance.
Operationally, we’ve scaled from a single hospital to 19 across India, with over 5,197 beds. Our procurement strategy has delivered over 400 basis points in material cost savings over four years. Clinical improvements have also played a role—our average length of stay dropped to 3.2 days in FY25 from 3.4 in FY24, and higher occupancy rates have pushed ARPOB (Average Revenue Per Occupied Bed) up by 12 percent year-on-year.
Looking ahead, we expect the merger with Quality Care India to unlock further synergies, contributing to a 10–15 percent uplift in EBITDA over the next few years.
Q. What kind of governance inputs did private equity provide?
Private equity has played a transformative role in strengthening our governance framework. Our first PE partner, True North, was instrumental in establishing Aster Medcity as our flagship hospital. Their involvement went beyond funding—they helped shape the brand around clinical excellence, technology, and patient trust.
Olympus Capital, one of our longest-standing partners, provided strategic oversight at the board level. Their guidance was crucial in driving long-term initiatives like the India–GCC business segregation and instilling financial discipline across operations. They also helped enhance our performance monitoring systems, ESG practices, and overall investor readiness.
These partnerships have not only accelerated our growth but also ensured that Aster is governed with rigour and resilience—preparing us well for the next phase of expansion.