New Delhi, May 12 -- Omni Hospitals, a multispecialty chain operated by Incor Hospitals Pvt Ltd, is seeking to raise funds from private equity firms in a fresh round and is scouting for potential suitors, according to three people familiar with the matter.

The Hyderabad-headquartered company, which has a presence in Andhra Pradesh, is looking to raise between Rs 100 crore and Rs 150 crore (around $10.6-15.9 million) in the round, one of the persons said. However, a second person said the company could raise as much as Rs 200 crore (around $21 million) in the capital raise.

It couldn't be ascertained what portion of its stake the company intends to sell or the valuation it may target.

The company has also appointed an investment banker, according to the second person. VCCircle couldn't independently identify the firm appointed for the proposed transaction.

Queries sent to Omni Hospitals remained unanswered till the time of writing.

Omni Hospitals is part of Hyderabad-based Incor Group, a real estate management company founded in 2006 by Suryanarayana Reddy Pulagam. Incor entered the healthcare sector in 2010 with Incor Hospitals, which operates the multi-speciality hospital business under the Omni Hospitals brand. The hospital chain operates with a 600-bed capacity across six locations in Telangana and Andhra Pradesh; each of its hospitals has a capacity of around 100-150 beds.

This isn't the first time Omni Hospitals is seeking to raise external capital. In 2013, mid-market PE firm ASK Pravi, a joint venture between ASK Group and Pravi Capital, invested $9.8 million (Rs 60 crore at the time) for a significant minority stake in Omni Hospitals. The company had planned to expand operations into southern and eastern India through acquisitions. In early 2014, Omni acquired Udai Hospital in Hyderabad and renamed it Omni Udai Hospital.

In 2016, Omni Hospitals initiated a second round of capital raise for expansion which would involve an exit for its investor, VCCircle reported at the time. The hospital operator hired a merchant banker to seal a $45-50 million-worth transaction involving a majority stake, but the fundraising did not draw any investor interest.

In 2022, Omni Hospitals raised Rs 155 crore in financing from the Investec-managed Emerging India Credit Opportunities Fund I, with co-investment by Investec Bank, to "firm up its consolidation strategy" and give an exit to private equity investor ASK Pravi. At the time, the company said Incor planned to increase Omni Hospitals' bed capacity from over 800 to 1,500-2,000 over the next five to six years.

For FY25, Omni Hospitals recorded a 3.2% year-on-year increase in consolidated revenue to Rs 259.4 crore. In fact, revenue has been growing at a tepid pace for three years and is down from almost Rs 296 crore in FY22, according to VCCEdge, the data research arm of VCCircle. The company has also oscillated between profits and losses in recent years. It swung to a loss in FY23 and FY24 from a profit the year before but managed to return to profitability in FY25 with a net profit of Rs 4 crore, per VCCEdge.

Rising interest in the sector

The hospital sector in India has recorded many transactions over the past couple of years, with both private equity and strategic players showing interest in the space.

For instance, Premji Invest, the family office of billionaire Azim Premji, invested in Maharashtra-based hospital chain NewEra Hospitals Pvt Ltd last month. Later, Indira IVF acquired Kolkata-based IVF and gynaecology network Abha Surgy Healthcare Pvt Ltd.

Some companies are also exploring the capital markets route. Temasek-backed Manipal Hospitals in March filed a draft red herring prospectus with the Securities and Exchange Board of India for an IPO that consists of a fresh issue of Rs 8,000 crore ($853 million) and an offer for sale of up to 43.2 million shares by its promoters and existing investors. Creador-backed Paras Hospitals was also gearing up to refile for an IPO, with reports estimating that the company could raise as much as $200 million in the listing.

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