Hinduja Global divests healthcare services business for $1.2B to BPEA, shares locked in upper circuit


Hinduja’s business process management entity, Hinduja Global Solutions (HGS), has signed an agreement to divest its healthcare services business with Baring Private Equity Asia (BPEA) at an enterprise-based value of $1.2 billion (INR 9,000 crore).

The deal is expected to be complete within 90 days, subjected to shareholder and other regulatory approvals, and it said in an exchange filing late Monday.

After the announcement, the company shares locked the upper circuit of 5%.

Hinduja deal will fund the future investments

The exchange filing has quoted Partha DeSarkar, Global CEO, saying it is a strategic deal to fund its future growth. 

“Our healthcare services business has steadily grown over the years. We reached a stage where we could recommend to the promoter to divest stake in this business to unlock value for all HGS stakeholders,” he was quoted in the filing.

The company wants to shift to a digitally enabled customer experience firm. The deal will release funds to invest in customer experience technology space to achieve its global goal. “HGS will continue to focus on aggressively expanding its CES and Digital businesses in line with our goal to transform itself into a digitally-enabled customer experience (CX) company,” said Partha DeSarkar.

Services to healthcare clients delivered by the HGS Digital and HRO/ Payroll businesses will continue to be part of the HGS portfolio, the filing added.

BPEA On The Deal

Baring Private Equity Asia has been investing heavily in the technology service space. This third investment in healthcare technology service will help them to strengthen their foot. 

“This will be our seventh investment in the sector and third in Healthcare Technology Services following previous investments in CitiusTech and AGS Healthcare, and we continue to be excited about the digital transformation opportunity in the space,” Jimmy Mahtani MD was quoted in the filing.

The Shift And HGS’ Healthcare Services

The Healthcare Services vertical has over 20,000 employees across four geographies – India, the Philippines, the US, and Jamaica. It has recorded revenues of around $400 million in FY2021.

Post completion, HGS will transfer all client contracts, employees, and assets, including infrastructure related to the Healthcare Services business.

HGS Healthcare Services business covers the entire lifecycle of a payer entity, including member acquisition, enrollment & billing, benefit set-up, claims adjudication, and the various functions in the revenue cycle of a provider firm.

Share Performance Post Divestment

HGS shares are quoted on the BSE at INR 3,235.85, up by INR 154.05. It is locked in the upper circuit of 5%, a 52 week high. It has rallied 187.8% so far this year in comparison with BSE Sensex’s 15.4% advance. They have gained for the third straight session.

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