Yatharth shareholders back Rs 3,150 crore Advent issue as institutions split

Shareholders of Yatharth Hospital and Trauma Care Services have approved a preferential issue of equity shares and warrants worth Rs 3,150 crore to Rasmalai Limited, a Cyprus-incorporated affiliate of private equity firm Advent International, the company said in a stock exchange filing on 16 October 2026. All five resolutions put to the extraordinary general meeting (EGM), held by video conference on 15 October, passed with the required majorities.

The preferential issue itself, a special resolution, received 99.26 per cent of votes polled, including 96.49 per cent of votes cast by public institutions. The governance resolutions attached to the deal were much closer among institutions.

Where institutions pushed back

The resolution approving special rights for the investor passed with 91.71 per cent of votes overall, but public institutions voted 56.92 per cent for and 43.08 per cent against. Rights for the promoters passed with 89.54 per cent overall, with public institutions at 50.55 per cent for and 49.45 per cent against. An upside share arrangement with the promoters, on which the promoters had to abstain, passed with 61.55 per cent of votes polled.

The EGM notice sets out what was at stake. While its holding stays above thresholds in the restated articles, the investor may nominate up to two non-executive directors and one member each of the audit and the nomination and remuneration committees, and gains reserved matter rights and a pre-emptive right in future preferential issues. The promoters gain the right to nominate a majority of non-independent directors and their own reserved matter rights. The company describes the investor rights as customary protective rights for a minority shareholder.

The notice describes the upside arrangement as a payment by the investor to promoter Dr Ajay Tyagi. If the investor sells and earns more than three times its money, the promoters receive 33 per cent of the incremental profit pool between 3x and 3.5x and 20 per cent above 3.5x, settled mainly through transfer of the investor’s shares at Rs 1 each. The notice says the company bears no cost.

Deal terms and use of funds

Rasmalai will subscribe for up to 1,30,26,516 equity shares and up to 1,89,47,664 warrants at Rs 985.17 each, with 25 per cent of the warrant price paid up front and the rest on exercise within 18 months. On a fully diluted basis it would hold 24.87 per cent, while the promoters’ stake would fall from 55.80 per cent to 41.82 per cent. Completion remains subject to customary closing conditions. Yatharth said in its 17 September press release that it runs nine hospitals with about 2,800 beds and an announced capacity of about 3,250, across the National Capital Region, Jhansi-Orchha in Madhya Pradesh and Agra.

A corrigendum issued on 6 October, after the National Stock Exchange sought clarifications, allocates Rs 2,362.50 crore to expansion of the hospital network and infrastructure, including investment in subsidiaries, and Rs 787.50 crore to general corporate purposes, to be used within three years of allotment or, for money received when warrants are exercised, within three years of exercise. The company said it is identifying suitable targets and engaging investment advisers, and that expansion could take the form of stake purchases, joint ventures, operations and management agreements or asset purchases.

This investment underscores Advent’s deep and long-standing commitment to India’s healthcare sector, which we believe is entering a decade of structural growth as access expands, quality improves, and consolidation advances.

Pankaj Patwari, Managing Director, Advent

Our reading

• The Healthcare Daily’s reading: the capital raise passed easily; the governance package was far closer. Nearly half the institutional votes cast went against the promoter rights, which suggests some fund managers are uneasy about layered rights for a private equity investor and a founding family in a listed company.
• For owners of standalone hospitals in the National Capital Region and nearby states, the filing signals a buyer with money. With acquisitions named as a route for Rs 2,362.50 crore of expansion funds, approaches to sellers are plausible, although no targets have been disclosed.
• The pace of spending depends on when Rasmalai exercises the warrants, which carry 75 per cent of their price on exercise. The corrigendum says that if the up-front warrant money is fully used within six months, the company expects exercise within 15 months of allotment, but the 18-month tenure is the only firm limit.