With 14,000 beds, we will become one of the largest healthcare providers in India, says Alisha Moopen

Aster DM Healthcare and Quality Care India Ltd. (QCIL) have entered into definitive agreements for a merger, pending regulatory and shareholder approvals. Backed by global marquee investors Blackstone and TPG, the newly formed entity, Aster DM Quality Care Limited, will bring together four brands: Aster DM, CARE Hospitals, KIMSHEALTH, and Evercare, creating a network of 38 hospitals and over 10,150 beds across 27 cities.

The merger aims to strengthen the combined entity’s position among the top hospital chains in India, with plans to add 3,500 new beds by 2027. Aster is valued at 36.6 times its expected earnings for FY24, while QCIL is valued at 25.2 times. Alisha Moopen, Deputy Managing Director of Aster DM Healthcare, spoke to Business Today about the strategic vision behind the merger and its potential impact on the healthcare industry. Edited excerpts: 

BT: What was the strategic vision behind the merger and what competitive advantages will it bring?

AM: When our chairman, Dr. Azad Moopen, decided to separate the Gulf Cooperation Council business from the India business, his objective was clear. He wanted two independent businesses—one focused on India and the other on the Gulf Cooperation Council, which has also been our core market. Once the separation happened, we saw two options. We could either build an Indian business organically, which would take 10 to 20 years, or we could partner with like-minded businesses that share our values and ethos. We thought, why wait 10 years to achieve this organically when we can accelerate it and create benefits for our doctors, patients, and shareholders?

We started evaluating some options, continuing our focus on organic expansion. When we began talking to Care Hospitals, the conversation had been going on for some time, but it became more strategic in the last year when we knew the segregation was imminent. We realized that the two businesses are complementary, both geographically and in terms of size. We're both close to 5,000 beds each, which enhances the scale. We moved from being present in 15 cities with leadership in those cities to 28 cities, covering nine states—South and Central India. With this merger, we become one of the top three healthcare providers in the country.

BT: Given this scale, how do you plan to leverage synergies between the two businesses?

AM: Strategically, this makes a lot of sense because of the synergies between the two groups. At Aster, our focus has always been on clinical excellence and delivering the best care and outcomes for our patients. Care Hospitals, especially with its backing from private equity firms like Blackstone, which has deep investments in life sciences, aligns with our approach. Healthcare is changing rapidly—whether from a life sciences or a digital perspective—so we thought it would make sense to combine the best of both worlds to advance healthcare delivery and gain economies of scale quickly.

BT: How will these synergies help you achieve better financial outcomes? What is the strategy going forward?

AM: By doing this, we can focus on having the highest levels of governance. We are confident the synergies will create significant economies of scale, benefiting patients with better price points. From a commercial perspective, the merger should make our business more sustainable and improve financial outcomes. This isn't just one of the biggest mergers in India; globally, it's the biggest healthcare transaction this year.
Looking at the disease mix in India, we believe there need to be more investments in oncology. At Aster, we have strengths in neurosciences, oncology, organ transplant care, and cardiac sciences. Combining these strengths and fostering collaborative knowledge sharing will help us create better clinical protocols and pathways, allowing us to serve a wider patient base with improved outcomes. The combination of healthcare innovation—both technical and digital—will help us make strategic investments in a very expensive healthcare environment. These economies of scale and strategic partnerships will help us unlock opportunities in the future. One key aspect of this merger is that the entity expects to add around 3,500 new beds between 2024 and 2027.

BT: How do you plan to address the bed shortages in underserved areas, especially considering that most private-sector healthcare is concentrated in urban India?

AM: There is a significant demand-supply gap in healthcare, and we aim to bridge that. Aster was initially focused on Kerala, Karnataka, Andhra Pradesh, and Telangana. But with this merger, we now have exposure to Madhya Pradesh, Odisha, Chhattisgarh, and Tamil Nadu, which will allow us to cover many more micro-markets, including Tier 2 and some Tier 3 cities. With 10,000 beds now and nearly 4,000 additional beds coming over the next three years, we can significantly expand care in Tier 2 and Tier 3 markets. In the short term, our goal is to stabilize the platform post-merger and leverage the scale of the business. With 14,000 beds, we will become one of the largest healthcare providers in India. After that, we will be opportunistic about looking at inorganic and organic growth options. Our aim is to become the best healthcare provider in India, with a focus on both scale and outcomes. Backed by Blackstone, we will also be very mindful of our choices, focusing on clinical outcomes and patient satisfaction.

BT: As consolidation continues in the healthcare sector, particularly in Tier 2 and Tier 3 cities, what potential do you see in these markets?

AM: Our journey has been unique. We started in Tier 2 and Tier 3 cities before expanding to metros. Our first hospital was MIMS in Calicut, over 25 years ago, and from there, we expanded to Kochi, Kolhapur, Guntur, and others before moving into metro cities like Bangalore. The challenge of operating in Tier 2 and Tier 3 cities is that attracting doctors and healthcare professionals is tougher than in metros. But we've built sustainable models in these markets. With this merger, we have leadership in 28 micro-markets—not just metros. Cities like Bangalore and Hyderabad are the only two metros in our portfolio. Our expertise in scaling operations in Tier 2 and Tier 3 cities is one of our key differentiators. We are well-placed to drive scale and make a meaningful impact in these regions. We have proven our track record and believe this will continue to be our strength.

BT: How do you envision collaboration across the broader healthcare ecosystem to improve patient outcomes?

AM: We firmly believe that healthcare cannot be fragmented or disconnected. With changing disease patterns and the rise of lifestyle diseases, connected care is essential. Having pharmacies, clinics, and primary care all interconnected is very important. We don't currently have plans to run independent pan-India platforms or verticals for these services. Instead, in each state where we have a presence, we aim to create a strong ecosystem to provide comprehensive care. Whether a patient needs treatment for a cold or cough, a minor procedure, or even a complex quaternary care procedure, we want to ensure we can offer the full spectrum of services. This includes home lab services and home delivery of medicines. We want holistic care—it cannot be fragmented.
This approach is made possible by partnerships. Scale is key here—it allows us to make necessary investments, gather data, and develop meaningful predictions and care pathways that improve patient outcomes. This aligns completely with what Dr. Moopen mentioned to you earlier.

BT: What are your plans to invest in the oncology segment, considering the rising cancer burden in India?

AM: There have been limited interventions in oncology because it is highly capital-intensive. In our network, we have about 15 Linear Accelerators within the Aster network, and only two in the Care Hospitals network. While they have multi-specialty care facilities, they haven't actively invested in oncology until more recently, with a launch just last week. We are clear that oncology requires deep expertise, and we are fortunate to have one of the country’s most prominent oncologists. We are building a formidable oncology department. At the Aster group level, we have an integrated oncology center, which will oversee all our hospitals. We are aiming for consistency in service quality—what you get in Bengaluru should be available in Kolhapur and all other locations where we are expanding oncology services. Investing in Linear Accelerators is relatively straightforward. The real challenge is manpower. That’s where Aster's clinical expertise, combined with Blackstone’s capital backing, will allow us to scale these services much faster.

BT: Private equity is increasingly targeting the Indian healthcare market. Firms like Blackstone, TPG, and KKR are heavily investing in this space. How do you see it influencing the industry's growth?
AM: The sector is booming, especially post-COVID. There is a huge business opportunity, and healthcare in India is thriving. Investors are looking at both the societal impact and the commercial case, making healthcare a very attractive sector for investment. At Aster, we have had private equity partners for the last 20 years. They have helped us scale in the Gulf Cooperation Council region and India. Over time, our partners, like True North, Olympus, and now Blackstone, have added significant value, especially in terms of governance and capital allocation. However, our focus remains on healthcare. It’s about finding partners who share our values and mission. Post-COVID, there’s greater interest in investing in healthcare, and we see that as an exciting opportunity to create value for our stakeholders.