Max Healthcare acquires Equova Healthcare to build 400 bed hospital

11 Feb 2022 , 09:15 AM

In its press release on Friday, Max Healthcare Institute Limited, one of the leading largest private healthcare providers in India, has announced that the company has entered into a deal to acquire Eqova Healthcare Private limited (‘Eqova’). Equova has long-term exclusive rights to aid the development of and provide medical services to a 400-bed hospital to be built on 2.1 acres of land parcel in Patparganj, Delhi, owned by Nirogi Charitable and Medical Research Trust.

The initial acquisition of majority stake is by way of upfront purchase of 26% stake, with an Escrow mechanism set up for an additional 34% under call/put options to be exercised linked to the achievement of certain milestones. In addition, the parties have agreed to call/put options for the balance stake to be exercised on the achievement of defined milestones.

“This new hospital will allow us to cater to the need for quality healthcare of East Delhi community and fortify our network footprint in NCR in a synergistic manner. It will further enable us to bring high-end clinical programs and technologies to the region and also help us to continue serving the indigent patient community” commented Dr. Abhay Soi, Chairman and Managing Director, MHIL.

The hospital will be located on NH 24 expressway and falls on the metro corridor, ~ 300 metres from IP Extension Metro Line. The site is ~ 800 metres from the existing 402 bed Max Super Speciality Hospital, Patparganj, which has been consistently reporting a high level of occupancies (more than 81% during the FY18 — FY 20 period). The hospital shall thus have both revenue and cost synergies with the existing facility. Presently, a 20 bedded hospital is operating at the site.

Under phase 1, 250 beds will be commissioned in H1 FY26 and the hospital will have high-end medical programs such as oncology, organ transplant and offer multi-disciplinary care in the area of cardiac sciences, neurosciences, renal sciences, etc. 150 beds will be operationalized in phase 2 after commissioning of phase 1. The hospital, once fully operational, shall directly employ ~2,000 people and provide free treatment to ~60,000 patients belonging to the economically weaker section annually in its in-patient and out-patient departments.

MHIL is currently trading at Rs383.75 down by Rs0.3 or 0.08% from its previous closing of Rs384.05. The scrip opened at Rs389.90 and has touched an intraday high and low of Rs389.90 and Rs379.05 respectively.