ICICI Venture, the largest domestic private equity fund in the country, has roped in a foreign strategic healthcare investor in its endeavour to become a healthcare investment major in the country.
The strategic partner would invest $80 million in IVEN Medicare, the fully-owned subsidiary of ICICI Ventures, to form a special purpose vehicle.
"We currently have $80 million in IVEN from ICICI India Advantage Fund Series II and would raise another $90 million through debt. The new entity would have a capital base of $250 million, to start with," said Alluri Srinivas Rao, Director, Investments, ICICI Ventures.
Rao said that a formal announcement regarding the tie-up would be made by the end of this month.
The new company would acquire majority stakes in key regional hospitals. It will use its large balance sheet and size to buy equipment, help the hospitals raise money and hire doctors.
The company has invested in three major healthcare units in the country and plans to invest another Rs 200 crore (Rs 2 billion) in a couple of hospitals in Karnataka and Tamil Nadu, announcements of which are due in a month's time.
"We have seven such tie-ups in the pipeline. The amount of $250 million would be utilised for the 12 projects," he added.
The company would not hesitate to raise further capital when necessary and may go to the public if the situation demands.
"Funds would not be a problem as of now and the IPO might happen in two year's time," Rao explained.
IVEN would hold a majority stake in most cases. It would dilute its stake in a phased manner over a period of time. "Once these investment figures begin to reflect at our balance sheet, we would become one of the largest healthcare players in the country," he claimed.
Meanwhile ICICI Venture on Tuesday announced an investment of Rs 65 crore (Rs 650 million) in the Kolkata-based Medica Synergie. The investments, made through IVEN Medicare, would be used for expansion.
"ICICI Venture sees itself as a `catalyst' and it is our endeavour to partner with people/organisations who have a strong, clear vision to bring about concrete, positive change in society and help in nation-building and betterment of society. MPSL's integrated business model, with its highly accomplished professionals, is an excellent framework for IVEN Medicare to add value and drive cost synergies," Rao said.