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CCI Approves Aster DM–Quality Care Merger; New Entity Named Aster DM Quality Care

Synopsis:

The Competition Commission of India has approved the merger of Aster DM Healthcare and Quality Care India Ltd. The new entity, Aster DM Quality Care Ltd, will operate 38 hospitals with over 10,150 beds across 27 cities in India.


The Competition Commission of India (CCI) has approved the merger of Aster DM Healthcare Ltd and Quality Care India Ltd (QCIL) through a scheme of amalgamation. The merged entity will be named Aster DM Quality Care Ltd, creating one of India's largest private healthcare networks.

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Key Takeaways

  • Aster DM Healthcare and QCIL to merge, forming Aster DM Quality Care Ltd.

  • Combined entity to operate 38 hospitals with over 10,150 beds across 27 cities.

  • Aster to acquire a 5% stake in QCIL from BCP Asia and Centella before the merger.

  • Post-merger, Aster shareholders will hold 57.3%, and QCIL shareholders 42.7% in the new entity.

  • Aster DM Healthcare share price closed at ₹489.45 on the NSE, down 2.17% on the day of the announcement.

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Merger Details and Shareholding Structure

Prior to the merger, Aster will acquire a 5% stake in QCIL from BCP Asia II TopCo IV Pte Ltd and Centella Mauritius Holdings Ltd in exchange for primary shares. Post-merger, Aster shareholders will hold 57.3% of the combined entity, while QCIL shareholders, including Blackstone and TPG-backed entities, will hold 42.7%. Centella will hold less than 10% stake without control rights.​

Expanded Healthcare Network

The merged entity will operate 38 hospitals with over 10,150 beds across 27 cities in India. Aster currently operates 19 hospitals with 4,867 beds, 13 clinics, 215 pharmacies, and 232 labs across six states. QCIL operates 26 healthcare centres under the brands CARE Hospitals, KIMS Health, and Evercare, with over 5,150 beds in 14 cities.​

Financial Performance and Outlook

For the first nine months of FY25, Aster reported a 15% revenue growth to ₹3,138 crore, with a 35% increase in operating EBITDA to ₹613 crore. The merged entity aims to expand its bed capacity by 3,500 beds over the next 2-3 years through brownfield and greenfield projects.​

Aster DM Healthcare Share Price Performance

On the day of the announcement, Aster DM Healthcare share price closed at ₹489.45 on the NSE, down 2.17%. The share price has gained 0.21% over the last week and 1.23% since the beginning of April. Year-to-date, the stock has risen 4.77%.​

The merger of Aster DM Healthcare and Quality Care India Ltd marks a significant consolidation in India's private healthcare sector. The combined entity, Aster DM Quality Care Ltd, will have a substantial presence across the country, offering a wide range of medical services and specialties. Investors and stakeholders will closely monitor the integration process and the performance of the merged entity in the coming quarters.

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Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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