MUMBAI : Warburg Pincus has picked up a stake in Chennai-based Appasamy Associates Pvt. Ltd., a manufacturer of ophthalmic equipment and devices, in what is the US-based private equity firm’s largest investment in the healthcare sector in India, a statement released by the two firms said.

Though the firms did not disclose the financial details of the deal, people with knowledge of the matter said that Warburg has acquired around 65% stake in the company for nearly $300 million. The promoters will continue to hold the remainder stake, they said.

Appasamy is India’s largest manufacturer of ophthalmic equipment and intraocular lenses (IOLs). The company is present across the entire value chain of ophthalmic devices – diagnostic, surgical equipment, and IOLs.

“Medical devices for us is a programmatic thesis and this (investment in Appasamy) is not a one-off deal. We have created a very differentiated healthcare portfolio. These companies are not just local champions who dominate the market in India but also have the ability to become global players. So, it is a great combination of growth in local market and being able to export too,” Narendra Ostawal, head of India private equity, Warburg Pincus, told Mint.

According to him, while ophthalmology looks like a niche, it is has a very big market globally. “What is happening today is that financial sponsors are looking for stories with more resilience especially when there is so much uncertainty in the global markets. And healthcare provides that resilience,” he added.

“We are witnessing a period of strong growth for the Indian healthcare sector, particularly ophthalmology, and we expect to see significant opportunities in both the domestic and export markets. As Appasamy progresses into this new era of expansion, we are excited to partner with Warburg Pincus given the firm’s global expertise in healthcare and its long-term business-building focus in India,” Senthil Kumar, CEO, Appasamy, said in the statement.

In the Indian pharma and healthcare sector, Warburg Pincus has invested in companies such as Meril Life Sciences, MedPlus, Laurus Labs, and Metropolis Healthcare.

With the latest deal, Warburg has invested $1.2 billion – $1.3 billion in the Indian market in the last 12-18 months. It has also been able to return more than $2 billion through exits from the Indian market in over a year.

These exits have come from full or partial stake sales in companies such as Perfios, IDFC First, and Kalyan Jewellers, among others.

Having been in India for more than 25 years, Warburg is looking to spend more time scouting for healthcare deals in the country. The firm raised a $17.3 billion global fund in 2023.

“We are looking at doing new things. We are betting on consolidation in some sectors such as pharma, there is scope in healthcare and strong pipeline of family-owned businesses that are going to come to the market. These opportunities excite us for 2024,” Ostawal said.

Warburg focuses on sectors such as consumer, technology, financial services and healthcare/pharma for investments.

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Published: 10 Apr 2024, 08:13 PM IST