Cygnus Medicare in talks to raise Rs200 crore
- ByStartupStory | December 27, 2022
According to two sources with knowledge of the situation, a number of institutional investors, including private equity firms and development finance organizations, are in discussions to invest in Cygnus Medicare Pvt. Ltd., which manages the hospital network Ujala Cygnus Healthcare Services. Proparco SA, MO Alternate Investment Advisors, and Paragon Partners, among others, are in discussions with the hospital operator, according to an anonymous source. The company intends to raise between 150 and 200 crore to give some of its supporters an escape.
A representative for Ujala Cygnus described the development as “speculation.” Up until the time of publication, email inquiries to possible investors and EY went unanswered. However, a spokesperson for Ujala Cygnus confirmed the fundraising effort and stated that the closure is anticipated for February 2023 in an interview with The Economic Times on December 22.
Institutional investors in the company include Somerset Indus Healthcare Fund, Evolvence India Fund, and Eight Roads Ventures India. However, Mint was unable to instantly identify which of these investors wanted to sell their holdings.
The second individual, who also asked to remain anonymous, claimed that the corporation had assigned the investment banking division of EY to look for potential investors.
At a post-money valuation of at least 1,000 crore, the business is looking to raise money.
When Amar Ujala acquired the bulk of the company’s stock in November 2019, Eight Roads Ventures and Somerset Indus made partial exits.
According to its website, Cygnus, which was founded in 2011, has more than 300 doctors and medical professionals and runs 18 hospitals in 15 Tier-II and Tier-III cities in Haryana, Uttar Pradesh, Uttarakhand, Jammu & Kashmir, and Delhi.
The hospital network claims to have served more than 1 million patients to date and provides services in more than 30 specialties, including oncology, nephrology, urology, gastroenterology, orthopedics, reconstructive surgery, diabetes, and so on.
Recently, dealmaking has surged in the Indian healthcare industry. Three domestic funds invested in Sri Kavery Medical Care Pvt. Ltd’s fundraising round last month, according to a report from VCCircle, which manages the chain of Kauvery Hospitals.
Oasis Centre for Reproductive Medicine, an in-vitro fertilisation (IVF) network with a focus on South India, raised $50 million in equity capital from local PE company Kedaara Capital in August. While International Finance Corp-backed eyecare chain Eye-Q Vision had competition from ASG Hospital and Dr. Agarwal’s Health Care. General Atlantic and Kedaara Capital spearheaded a round of funding for ASG that totaled 1,500 crores in July.
This was quickly followed by Dr. Agarwal’s 1,050 crore PE fundraising effort in May. In addition to enhancing their organic growth strategies, both companies have acquisition plans in place.
Fractal, a company that develops artificial intelligence, joined the unicorn club after receiving $360 million from TPG in January of this year. The 22-year-old company’s $1 billion valuation came after it experienced a respectable increase in revenue that came close to Rs 1,300 crore in FY22.
However, as personnel and legal expenditures increased faster than sales growth, the company sank into losses. In the second part of the narrative, we will examine Fractal’s costs and losses. Focus on the revenue side for the time being. According to the company’s consolidated financial accounts filed with the Registrar of Companies, its operational scale increased 48.3% to Rs 1,295 crore in FY22 from Rs 873 crore in the prior fiscal year (FY21).
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