Impact investor LGT Lightstone Aspada invests in Kauvery Hospital

Sri Kavery Medical Care Pvt. Ltd, which runs hospital chains under Kauvery Hospital in Tamil Nadu, has raised Rs 140 crore ($19.4 million) in equity from impact investor LGT Lightstone Aspada.

The company will use the funds for expansion in Tamil Nadu and other South Indian regions, Kauvery said in a statement.

S. Chandrakumar, founder and executive chairman at Kauvery Hospital, said that the company plans to expand through a mix of strategic partnerships, acquisitions and brownfield hospitals.

S. Manivannan, co-founder and managing director at Kauvery Hospitals, said the company believe that the investment from LGT Lightstone Aspada is an endorsement of Kauvery Hospital’s success in creating a model delivering high quality healthcare services at affordable prices to its patients across all markets.

“Kauvery Hospitals will continue to drive growth with focus on efficiency and patient care,” he said.

It aims to add additional 12-15 hospitals with a capacity of more than 3,000 beds over the next three to five years. The company will deploy around Rs 700 crore for the entire expansion.

Kauvery Hospital, which was established in 1999, has currently presence in various cities in Tamil Nadu such as Trichy, Chennai, Salem, Hosur and Kariakudi.

Kartik Srivatsa, managing partner at LGT Lightstone Aspada, said the investment in Kauvery is an important milestone in firm’s effort to contribute towards building an interconnected healthcare system in India.

Veda Corporate Advisors advised Kauvery Hospital on the deal.

In 2009, Kauvery Hospitals raised $6.09 million from Piramal Enterprises-backed India Venture Advisors (IVA) fund.

In 2016, VCCircle reported that the family office of serial healthcare entrepreneur GSK Velu was investing in the hospital chain. The deal comprised both primary infusion of funds and a secondary component to given an exit to IVA.

This is LGT Lightstone Aspada's first investment after LGT said last month that it has acquired the management organisation of Aspada and a significant majority position of its portfolio from Aspada’s sole shareholder, Soros Economic Development Fund (SEDF).

In the hospital segment, Aspada has earlier backed South India-based hospital chain Be Well Hospitals.

Regional hospital deals

The regional hospital segment has recorded four other major deals this year.

In June, Be Well Hospitals raised fund from Overseas Private Investment Corporation (OPIC), a development finance institution of the US government, invested in Tamil Nadu-based Pvt. Ltd.

In the same month, VCCircle reported that healthcare-focused private equity firm Somerset Indus Capital Partners invested in Jaipur-based Apex Hospitals.

Also in June, private equity giant KKR, via its credit business, invested in Kerala-based hospital operator Baby Memorial Hospital Ltd.

Earlier this year, Everstone Group agreed to acquire a controlling stake in Sahyadri Hospitals Ltd, which operates five tertiary-care and three secondary-care hospitals with 900 beds across Pune and Nashik.

In July, VCCircle reported that General Atlantic-backed Krishna Institute of Medical Sciences (KIMS Hospitals) is in an advanced stage to acquire a private equity-backed regional hospital chain.