Adani Group, Apollo in talks to buy a majority stake in Metropolis

Billionaire Gautam Adani and India's biggest hospital operators, Apollo Hospitals Enterprise Ltd are assessing bids to take a majority stake in Metropolis Healthcare Ltd, a media report said. 

Adani and Apollo's deal with Metropolis could be at least worth $1 billion or Rs 7,765 crore, given the market captalisation of the diagnostic chain and its operations, Mint reported quoting two people familiar with the matter. 

This comes after the Adani Group, one of India’s largest business conglomerate, last month announced its foray into the healthcare sector and reports suggested that it is planning to acquire large hospitals and diagnostic assets. Adani Enterprises in May said it has incorporated a wholly-owned subsidiary, Adani Health Ventures (AHVL), for this purpose.

To gain a foothold in the sector, Adani Group has reportedly earnmarked $4 billion for the business. 

The Adani Group, which has more than $20 billion in annual revenue, is also interested in entering the pharmacy space, through both online and offline routes, reports suggested. 

In the last 8 years, the Adani Group has acquired 30 different entities in different sectors, including in power, green energy, infrastructure, airports and food processing. 

Metropolis Healthcare Ltd started in 1980s as just one lab. The diagnostic chain currently operates in 19 states across the country. 

The pathology chain got its first external funding from ICICI Venture in 2005 of Rs 35 crore. Later, PE firm Warburg Pincus invested $85 million in the company, marking an exit for the ICICI Venture. 

The founding Shah family, backed by KKR India, in 2015 bought back 27% stake of Warburg Pincus for ₹550 crore. The company brought marquee investor Carlyle later that year after the PE firm bought out its co-promoter GSK Velu’s stake in a board battle.