Temasek Holdings invests Rs 140 crore in HealthCare Global Enterprises

Bengaluru: Temasek Holdings, Singapore's state-owned investment company, has invested Rs 140 crore in Bangalore-headquartered cancer care provider HealthCare Global Enterprises (HCG).

The deal, which closed this week, values the company around Rs 1,000 crore, with HCG's founder and chairman BS Ajaikumar retaining a 26-28% stake, according to a person with direct knowledge of the deal.

"This investment is a good wake-up call that India is ready to take centre stage in oncology," said Ajaikumar. "It is a good feeling." The company will use the funding to double its network to 50 centres in India and Africa. It also has plans to enter the multi-speciality space.

Temasek joins existing investors Premji Invest, an investment entity owned by Wipro chairman Azim Premji, and Milestone Religare in a primary equity issuance by the company.

"We are pleased to invest in this firm which has redefined cancer care in India," said Rohit Sipahimalani, who heads the India practice for Temasek. The investment firm's $157-billion portfolio counts Bank of China, telecom firm Airtel and Singapore Airlines among its major companies.

Temasek's investment in HCG has also paved the way for Dubai-based alternative investment house Evolvence Capital to exit. The firm which had invested 30 crore in HCG almost five years ago out of its Evolvence India Life Sciences Fund has gained close to 2.3 times return on investment.

This is the second time that a private equity fund has made a successful exit from HCG. The medical care provider initially raised Rs 50-crore from IDFC Private Equity almost seven years ago. When HCG raised a subsequent round of 240 crore from Premji Invest and Milestone, it enabled IDFC to exit the venture last year in April.

"Investors are chasing single-speciality chains instead of multi-speciality, as the model is more profitable, focused and it is easier to predict the outcome," said Harish HV, partner at Grant Thornton India.

Private equity and venture capital investments in the healthcare industry in India are increasing rapidly as supply is woefully low and demand continues to surge. Last year, the industry absorbed $1.2 billion across 48 deals, according to research firm Venture Intelligence. In 2011, there were 38 deals in the sector worth $421 million.