The hospital says though acquisition looks expensive, it will offer the entire spectrum of services in Health City. The hospital said that this will have a limited impact on financials given small deal size, besides the said acquisition is in-line with guidance of Rs 1000 crores capex as guided by mgmt. for FY23

Narayana Hrudayalaya (NARH) recently signed an agreement with Shiva and Shiva Orthopaedic Hospital to acquire its 100 beds Orthopaedic and Trauma Hospital in Bengaluru on a slump sale basis for Rs 280 crores (Rs 80 crore to be recovered after 4 years).

The hospital says though acquisition looks expensive, it will offer the entire spectrum of services in Health City. The hospital said that this will have a limited impact on financials given small deal size, besides the said acquisition is in-line with guidance of Rs 1000 crores capex as guided by mgmt. for FY23.

NARH has signed a Business Transfer Agreement (BTA) with Shiva and Shiva Orthopaedic hospital (Sparsh Hosur Road unit) located in Narayana Health City Campus. The company agreed to pay Rs 200 crores upfront and subscribe for Rs 80 Crores Optionally Convertible Debentures (OCDs) to be redeemed after 4 years.

NARH would have the right to convert OCDs into equity shares of the company (Shiva) in case of default. There is no intent from NARH to acquire other units of Shiva and the acquisition will be completed before CY Dec-22.

“We believe NARH’s aggressive capex plans in India along with Cayman operations over next 2-3 years will enhance growth visibility beyond FY24. Additionally, the company's ability to generate healthy margins/profitability in the new Cayman unit will be a key monitorable,”  the company said in a statement.

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