New Delhi, Aug. 10 -- Blackstone, the world's biggest private equity firm, is laying the groundwork to reap superlative returns through a partial exit from an India portfolio company that it acquired from a European peer almost a year ago.

The American PE giant, which pulled out more than $100 million via a partial exit from a real estate investment trust in May and is on course to taking its local warehousing platform public, has now outlined plans to sell part of its stake in AGS Health Ltd.

Chennai-headquartered AGS has filed an updated draft red herring prospectus for an initial public offering that would raise as much as Rs 4,800 crore ($503.5 million). The healthcare IT firm itself is seeking to raise Rs 1,800 crore by issuing new shares while Blackstone, its majority owner, is selling a portion of its stake for as much as Rs 3,000 crore, according to the draft prospectus.

The company plans to use the proceeds from the public issue to partially or fully repay certain borrowings availed by two indirect subsidiaries: AGS Health BCP LLC and AGS Health BCP Holdings Inc. These units The rest of the proceeds will be used for general corporate purposes.

Blackstone invested Rs 7,825 crore (about $904 million) to acquire a 98.54% stake in AGS Health in July last year. Of this, it put in Rs 3,596 crore via primary infusion and the remaining via secondary purchases from Swedish PE firm EQT.

While AGS will disclose its targeted valuation and the IPO pricing only after receiving regulatory approvals, a person familiar with the company's plans told VCCircle that it could push for a valuation of as much as $3 billion (Rs 28,596 crore) in the proposed IPO.

At this valuation, the swift exit will help Blackstone reap an internal rate of return (IRR) of 135-148% and a multiple on invested capital (MOIC) of 3.3-3.4x in rupee terms, according to VCCircle estimates. This assumes the company floats its IPO in the last quarter of the year subject to various regulatory approvals.

Even if AGS Health targets a valuation of $2 billion in the IPO, Blackstone's returns would still be over 60-70%.

In dollar terms, Blackstone's returns would be slightly lower due to the rupee's depreciation against the greenback. In any case, Blackstone annualised returns would easily surpass the benchmark of 20% IRR in rupee terms and the 15% IRR that PE firms usually chase in dollar terms.

Set up originally as Adroit Global Solutions India Pvt Ltd in Chennai, AGS Health offers revenue cycle management (RCM) solutions to US healthcare providers via a comprehensive platform combining AI-driven solutions, data analytics and specialized global delivery capabilities. The company competes with IKS Health, among others.

RCM encompasses the entire patient journey, from initial appointment scheduling through final payment collection. This spans front-end operations (patient access, insurance verification, prior authorization), mid-cycle functions (clinical documentation, medical coding, charge capture) and back-end processes (claims submission, payment posting, denials management, collections).

In fiscal 2025-26, over 90% of AGS' revenue was derived from direct provider relationships where the company contracted directly, acting as a partner to healthcare providers, with healthcare providers rather than through intermediaries or third-party resellers.

In FY26, AGS' revenue from operations grew over 70% to Rs 2,041 crore, with a net profit of Rs 206.9 crore, according to its prospectus. Its EBITDA margins increased to over 38% in FY26, from 26.6% the previous year.

Published by HT Digital Content Services with permission from VC Circle.