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What is the story about?
Fortis Healthcare Ltd. has signed definitive agreements to acquire the 125 bedded People Tree Hospital in Yeshwanthpur, Bengaluru, through a 100% acquisition of TMI Healthcare, the entity that owns and operates the hospital. The stock gained in response to the deal on Monday, December 22.
The acquisition will be undertaken by Fortis Healthcare's wholly-owned subsidiary, International Hospital Ltd. As part of the composite transaction, International Hospital will also acquire the hospital building and the underlying land from the promoters of TMI Healthcare, along with an adjacent land parcel from an independent third party.
The total transaction value stands at ₹430 crore, including the debt on TMI Healthcare, and will be subject to customary closing adjustments as agreed in the definitive agreements.
People Tree Hospital is a NABH accredited multi specialty hospital located in Yeshwanthpur in north west Bengaluru.
The facility is situated in a dense residential catchment with growing commercial hubs nearby and has strong connectivity to major transport corridors. It offers key specialties including cardiac sciences, orthopedics, neuro sciences, renal sciences, and gastroenterology.
The acquisition of the additional 0.8 acre land parcel provides Fortis with the potential to expand bed capacity to over 300 beds. The company plans to invest an additional ₹410 crore over the next three years to enhance bed infrastructure, upgrade medical equipment, and strengthen clinical programs, including radiation oncology.
Based on the hospital's current annual revenue of around ₹74 crore in FY25, Fortis believes there is a major scope to scale operations, improve profitability, and support future expansion plans.
The transaction is expected to be completed by the end of January 2026, subject to the fulfilment of conditions precedent outlined in the agreements.
Commenting on the acquisition, MD and CEO Dr Ashutosh Raghuvanshi said the deal would further strengthen Fortis Healthcare's presence in Bengaluru, where the company currently operates seven facilities, including operations and management facilities, with the potential to scale capacity to over 1,500 beds from the current 900 beds.
Brokerage firm JM Financial has upgraded shares of Fortis Healthcare to "buy" from its earlier rating of "Add" with a price target of ₹1,093. The price target implies a potential upside of 21% from Friday's closing levels.
The brokerage expects Fortis' newly acquired asset to generate ₹600 crore in revenue with margins between 25% to 27% by financial year 2031-2032.
JM Financial expects Fortis' revenue and EBITDA to grow at a Compounded Annual Growth Rate of 17% and 26% over financial year 2025-2028, leading to a cumulative free cash flow generation of over ₹4,000 crore during the next three years.
Shares of Fortis Healthcare are trading 1.1% higher on Monday at ₹902.1. The stock is up 27% so far in 2025.
The acquisition will be undertaken by Fortis Healthcare's wholly-owned subsidiary, International Hospital Ltd. As part of the composite transaction, International Hospital will also acquire the hospital building and the underlying land from the promoters of TMI Healthcare, along with an adjacent land parcel from an independent third party.
The total transaction value stands at ₹430 crore, including the debt on TMI Healthcare, and will be subject to customary closing adjustments as agreed in the definitive agreements.
People Tree Hospital is a NABH accredited multi specialty hospital located in Yeshwanthpur in north west Bengaluru.
The facility is situated in a dense residential catchment with growing commercial hubs nearby and has strong connectivity to major transport corridors. It offers key specialties including cardiac sciences, orthopedics, neuro sciences, renal sciences, and gastroenterology.
The acquisition of the additional 0.8 acre land parcel provides Fortis with the potential to expand bed capacity to over 300 beds. The company plans to invest an additional ₹410 crore over the next three years to enhance bed infrastructure, upgrade medical equipment, and strengthen clinical programs, including radiation oncology.
Based on the hospital's current annual revenue of around ₹74 crore in FY25, Fortis believes there is a major scope to scale operations, improve profitability, and support future expansion plans.
The transaction is expected to be completed by the end of January 2026, subject to the fulfilment of conditions precedent outlined in the agreements.
Commenting on the acquisition, MD and CEO Dr Ashutosh Raghuvanshi said the deal would further strengthen Fortis Healthcare's presence in Bengaluru, where the company currently operates seven facilities, including operations and management facilities, with the potential to scale capacity to over 1,500 beds from the current 900 beds.
Brokerage firm JM Financial has upgraded shares of Fortis Healthcare to "buy" from its earlier rating of "Add" with a price target of ₹1,093. The price target implies a potential upside of 21% from Friday's closing levels.
The brokerage expects Fortis' newly acquired asset to generate ₹600 crore in revenue with margins between 25% to 27% by financial year 2031-2032.
JM Financial expects Fortis' revenue and EBITDA to grow at a Compounded Annual Growth Rate of 17% and 26% over financial year 2025-2028, leading to a cumulative free cash flow generation of over ₹4,000 crore during the next three years.
Shares of Fortis Healthcare are trading 1.1% higher on Monday at ₹902.1. The stock is up 27% so far in 2025.
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