Shares of Max Healthcare Institute Ltd were trading in the green and 2% higher on 16 September after the company announced acquiring a majority stake of 64% in Jaypee Healthcare (JHL). 

The goal of the agreement is for Max to purchase a 64% interest in Jaypee Healthcare (JHL), which is now going through the Corporate Insolvency Resolution Process (CIRP). The enterprise value of Rs 1,660 crore is the basis for the transaction.

In its regulatory filing, the company said, “Under the agreement, Max Healthcare shall organise debt for repayment of admitted claims of financial creditors of Jaypee Healthcare and proposes to simultaneously acquire a 64 per cent stake in the company, with a call and put option for the remaining stake.”

For the fiscal year 2024, JHL recorded revenue of Rs 421 crore and EBITDA of Rs 70 crore. JHL’s entire debt, interest included, is projected to be approximately Rs 1,000 crore. 

In order to refinance JHL’s present debt, Max Healthcare would temporarily solve the problem by applying to banks and other financial institutions for short-term loans up to Rs 1,000 crore.

The National Company Law Appellate Tribunal (NCLAT) has given approval towards the settlement agreement between Lakshdeep Group and the Committee of Creditors (CoC) of JHL.

The company added, “The transaction, which includes a strategic collaboration agreement and the acquisition of JHL’s stake held by financial creditors, shall be consummated in the next 30 days in line with the revival plan approved by the NCLAT.”

The National Capital Region (NCR), home to 46 million people and a key player in establishing the Indian economy as an economic hub is a formidable market for JHL. Abhay Soi, chairman and managing director of Max Healthcare Institute, commented on the acquisition, calling it an “important milestone in our journey.”

According to the company’s most recent investor presentation, Max Healthcare has been expanding rapidly in order to accommodate the installation of about 3,500 beds over the course of the next four years.

Max will have a stronger presence in North India thanks to the proposed acquisition, as JHL already owns three hospitals in Uttar Pradesh, including two that are open and operating in Noida and Bulandshahr. The Bulandshahr facility has 200 operational beds, while the Noida facility has 500 beds, of which 376 are now in use. With a bed capacity of 100, the third facility in Anoopshahar is non-operational. Currently, more than 4,300 beds are in use nationwide for Max Healthcare.

“The immediate impact of the acquisition will add around 576 beds to Max’s network, with plans for further expansion,” a person in the know said.

Speaking about the intentions for expansion, Soi stated that the business is still committed to developing a comprehensive plan that prioritises the sustainable provision of high-quality healthcare services while meeting the needs of all parties concerned. In the coming years, Soi continued, Max Healthcare plans to add 1,200 beds to its flagship centre in Noida.

At 12:15 pm, the shares of Max Healthcare were trading 2.73% higher at Rs 932.75 on NSE.

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