New Delhi, June 5 -- Creador, the Malaysia-headquartered private equity firm that invests across Southeast Asia and India, is planning to exit an Indian healthcare portfolio company that has revived its stock exchange listing plans.
The PE firm, led by founder and CEO Brahmal Vasudevan, intends to monetize its almost nine-year-old investment in hospital operator Paras Healthcare Ltd, which has filed its draft red herring prospectus with the country's capital markets regulator for an initial public offering.
The Rs 1,800-crore IPO consists of a fresh issue of shares aggregating up to Rs 500 crore and an offer for sale of shares totalling Rs 1,300 crore by Creador, Paras managing director Dharminder Nagar, and private equity funds managed by 360 ONE Asset.
According to the draft prospectus, Creador intends to mop up Rs 800 crore by selling shares in the IPO. While the document doesn't say whether the PE firm will sell all or part of its stake, it is likely that Creador will make a full exit.
Creador first invested Rs 260 crore in fresh capital in Paras in July 2017 and purchased additional shares worth Rs 15 crore from founder Dharminder Nagar. The deal valued Paras at around Rs 1,100 crore at the time.
Last year, the PE firm offloaded part of its stake in Paras for Rs 111.8 crore ($13 million at the time). Asset management firm 360 ONE Asset, part of Mumbai-listed 360 ONE WAM Ltd, bought the stake and also invested Rs 58.7 crore in Paras as primary capital. The pre-IPO transaction valued Paras Hospitals at slightly above Rs 2,300 crore.
Separately, Creador also sold another chunk of stake to alternative investment funds managed by Axis Asset Management Company for Rs 65.6 crore.
Prior to these twin deals, Creador owned a 24.68% stake in Paras. Its stake fell to 16.44% after the transactions.
In the latest move, if Creador fully exits, the North India hospital operator could be valued around Rs 4,865 crore, excluding the fresh issue. Including the fresh issue of Rs 500 crore, the company would be valued at Rs 5,365.5 crore, VCCircle estimates show. Separately, a banker who is not involved in the IPO process told VCCircle the company could target a valuation of around Rs 5,000 crore.
At these valuations, Creador is likely to generate around 16-17% internal rate of return (IRR) in rupee terms and a multiple on invested capital (MOIC) of 4.2 times, according to VCCircle estimates. This would be below the 20% IRR that PE firms typically chase in local currency.
The estimates are based on the first-in, first-out methodology and assume that Paras floats the IPO before the end of the year.
In dollar terms, which is more relevant for global PE firms such as Creador, the returns are less appealing, with the IRR around 11-12% owing to the rupee's depreciation and an MOIC of 2.8 times.
Overall, including last year's partial stake sales to 360 One and Axis funds for Rs 177.4 crore, Creador could generate roughly 15% annualised returns at a 3.55x MOIC in rupee terms. Its returns would be much lower in dollar terms, with an IRR of around 10% and an MOIC of 2.45x, VCCircle estimates show.
IPO journey
Paras Hospitals first filed its draft prospectus with the Securities and Exchange Board of India (SEBI) in late July 2024 to raise as much as Rs 400 crore in fresh capital. The IPO also included a plan by Creador to sell half its stake. Paras received SEBI approval in October that year but didn't go ahead with the offering, likely due to valuation concerns. The regulatory approval lapsed in October last year.
VCCircle reported in early 2025 that Paras might have weighed its IPO at a lower valuation than it initially targeted due to volatile equity markets and operational challenges.
DRHP deep-dive
The company plans to use the fresh capital to repay certain loans, invest in its Srinagar-based hospital under Plus Medicare Hospitals Pvt Ltd and repay the subsidiary's borrowings, and for other corporate purposes.
Since 2006, the company has relied on its flagship multi-specialty facilities in Gurugram, Patna, Darbhanga, and Panchkula, which have been key revenue drivers. These four hospitals contribute more than three-fourths of its revenue. Post-pandemic, Paras Healthcare has been ramping up operations in newer regions and expanding into other cities such as Srinagar and Kanpur. However, these hospitals, along with those in Ranchi and Udaipur, remain in early stages of operation.
According to its draft prospectus filed in 2024, while all of its hospitals reported steady revenue growth in the last few fiscal years, facilities operational for less than three years reported a combined EBITDA loss of Rs 30 crore in FY24. Two hospitals in the three-to-five-year range turned EBITDA-positive but had not yet achieved optimal occupancy levels. In March, Nagar told VCCircle that break-even typically occurs between two and three years, with a unit reaching maturity after five years. Around this stage occupancies are at about 60% and clinical programs are fully operational.
In its latest IPO papers, the company said that it operated a total bed capacity of 2,211 as of the end of fiscal year 2025-26. The company plans to have an overall bed capacity of 2,935 by March 2029.
In FY26, Paras' operating revenue jumped 24% to Rs 1,606 crore, with an operating profit of Rs 335.6 crore, according to the prospectus. It also swung into a net profit of Rs 43.8 crore in the same period from a loss of Rs 58 crore in FY25.
Revenues from its key specialisations-cardiac sciences, oncology sciences, neuro sciences, gastro sciences, orthopedics and sports injury, and renal sciences-increased to 74.7% of the company's revenue in FY26, up from 71.9% the year before. Across all its hospitals-mature, emerging, or new-the company saw strong growth in revenue and bed occupancy.
Published by HT Digital Content Services with permission from VC Circle.