New Delhi, Aug. 13 -- Ontario Teachers' Pension Plan (OTPP), the third-largest Canadian pension fund with assets under management of over $300 billion, is set to sign off from an Indian portfolio company with a healthy outcome.

The pension fund, which logged a few liquidity events last year from its infrastructure portfolio in the country, is set to sell the final tranche of its stake in Sahyadri Hospitals to Manipal Health Enterprises Ltd.

This comes nearly a year after OTPP divested its majority stake in Sahyadri to the operator of Manipal Hospitals. Terms of the transaction were not disclosed then.

VCCircle has now gathered that Manipal paid Rs 4,596 crore to buy a 78.71% stake in the private hospital chain last October. Two months later, it picked up an additional 9.84% stake for Rs 574 crore.

Manipal will now buy the remaining 9.84% from OTPP for Rs 574 crore. It will finance the transaction through the proceeds of the fresh issue in its recently completed initial public offering.

This would take the total payout to OTPP to Rs 5,745 crore (approximately $650 million) including previous tranches.

The pension fund had acquired a majority stake in Sahyadri Hospitals in 2022 through a mix of a secondary deal with the previous promoter, private equity firm Everstone Capital, and a fresh infusion. Across multiple tranches, including a fresh issue in 2024, it had shelled out around Rs 2,697 crore, VCCircle has gathered.

With the final stake sale, OTPP would be pocketing a little over 2x in its principal payment and score an internal rate of return (IRR), or annualized return, of 30% in rupee terms and 26% in dollar terms. This is way above the 20% and 15% benchmarks, respectively, that commercial alternative investors typically chase.

However, as a pension fund, OTPP may have a lower threshold to meet its objectives.

Notably, the actual payout to OTPP could go up further by an additional Rs 121 crore ($13 million). This is subject to the condition that Sahyadri manages to achieve an operating profit of Rs 400 crore on a last 12 months' basis before Manipal buys out the last tranche of shares. Manipal has to buy the remaining shares from OTPP by December 1, 2026.

Sahyadri logged EBITDA of around Rs 215 crore for the year ended March 31, 2025, on operating revenue of Rs 1,021 crore.

Sahyadri brought 1,606 additional licensed beds to Manipal's network and strengthened its presence in western India, especially Pune.

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