General Atlantic buys majority stake in Ujala Cygnus

US-based private equity (PE) firm General Atlantic has acquired a majority stake in Ujala Cygnus, a hospital chain in northern India with a network of 21 hospitals across tier II and tier III cities. 

The financial specifics of the transaction were not disclosed, but sources told Mint that the deal includes a primary investment of ₹400 crore in two tranches, along with a secondary investment of ₹600 crore.

The company’s early investors, Eight Roads Ventures, Somerset Indus Capital, and Evolvence Capital, made a full exit with the deal, according to a company statement.

Ujala Cygnus plans to use the funds to enhance clinical and civil infrastructure across its network and to improve its comprehensive care offerings in key specialties within its operational markets, the company said. 

Additionally, the investment will help Ujala Cygnus boost healthcare access in underserved areas and support healthcare professionals desiring to work closer to their origins, thus expanding the network across northern India.

Ramesh Kannan, senior partner at Somerset Indus Healthcare Fund told Mint that Ujala Cygnus’ success is a validation of Somerset’s belief that healthcare is needed and matters most in tier II and tier III markets, and is scalable and profitable.

“Ujala Cygnus has returned very good returns to its investors and we are happy with the result…Our third fund with a corpus of $250 million, currently being raised, will continue to focus on the interiors of India which needs healthcare most,” Kannan said.

This investment coincides with the optimistic outlook on the market potential in middle India. A recent Mint Investment Summit panel pointed out the notable contribution of smaller cities to FMCG and e-commerce sales, indicating the substantial purchasing power in these regions.

Deepak Gupta, general partner at WEH Ventures, commented on the robust profitability of large hospital chains. “Healthcare spend is increasing with more onset of chronic disease and increasing cost of treatment due to more sophisticated modes coming into play. There is a very large growing target addressable market and profit pool for new business models to emerge and chip away at.”

General Atlantic is known for its investments across sectors, including stakes in digital unicorn PhonePe, edtech unicorns Unacademy and Byju's, and property technology platform NoBroker, as well as healthcare investments across India and Southeast Asia such as ASG Eye Hospital, Biofourmis, KGbio, and health-tech platform Mable.