Global private equity firm LeapFrog Investments has invested approximately Rs 400 crore ($42 million) in Marengo Asia Hospitals, a multi-specialty hospital platform, according to an announcement on Friday.
The investment is being made from Leapfrog’s fourth fund and will support Marengo’s expansion and deepen access to quality specialist healthcare across India’s Tier-I and Tier-II cities.
“The proceeds will be used to consolidate our leadership in our existing markets while enabling us to expand into new geographies,” said Abhishek Kabra, MD of Samara Capital and Chairman of Marengo Asia Hospitals.
Marengo aims to double its hospital bed capacity to 4,000 beds over the next two years.
Marengo Asia Hospitals was advised by Avendus Capital on this transaction.
Established in 2021, Marengo Asia Hospitals operates five hospitals in India and has a strategic partnership in Saudi Arabia, with about 2,000 beds serving more than 900,000 patients annually. It has a presence in Gujarat and Delhi NCR and has expanded through acquisitions under a buy-and-build strategy.
Marengo is backed by Samara Capital, Havells and Godrej family offices. Samara Capital took a controlling stake in the hospital chain as part of its buy-and-build strategy and remains a controlling shareholder alongside Havells India, Godrej and LeapFrog. Its investment in Marengo was made from Fund III.
“It is roughly a $350-million fund, which, pooled with co-investments, is closer to $700 million. Typically, 50% comes through the co-investment route. We are focused on consumer, healthcare, financial services and business services. We’ve made about five investments from the fund so far, with almost 50% dry powder remaining,” said Kabra.
Officials from LeapFrog and Samara Capital declined to disclose further details on the valuation.
“We have seen significant deployment activity from Fund IV in just the last few months, particularly in healthcare,” said Biju Mohandas, partner and global lead for healthcare at LeapFrog Investments.
In the Philippines, LeapFrog partnered with local private equity firm Navegar to take a significant minority stake in Global Care Medical Center, which operates hospitals in Tier-II and Tier-III cities outside Metro Manila.
In Vietnam, LeapFrog provided growth capital to pharmacy chain Pharmacity, in its first healthcare investment in the country. The investment in Marengo is its latest healthcare deal.
Mohandas said LeapFrog assesses healthcare investments on two broad parameters: the investment thesis and the partner.
In India, the thesis was supported by rapid urbanisation, rising incomes and insurance penetration, as well as growing demand for chronic healthcare. “The demand-supply mismatch is massive,” he said, pointing to India’s 1.6-1.7 hospital beds per 1,000 people.
“If anyone can build high-quality healthcare infrastructure in urbanising India, there will be significant returns to be made—financial, but also huge impact,” added the executive from LeapFrog.
On the partnership, he said LeapFrog either takes majority control of healthcare businesses or works with established institutions. In Marengo’s case, the firm is partnering with Samara Capital, which he said had built the platform over the past six to seven years.
Beyond healthcare, LeapFrog has also invested in payments company Moniepoint in Nigeria and a couple of asset-backed lending companies in India, and is looking at something in Southeast Asia in financial services.
