The acquisition has been made for a cash consideration of Rs 68.86 crore. Post this acquisition, the company now holds 60% of equity stake in Eqova.

In February last year, Max Healthcare had announced the signing of share purchase agreement (SPA) and a shareholders' agreement (SHA) and other definitive agreements for acquisition of Eqova Healthcare in a phased manner.

The initial acquisition of majority stake was by way of upfront purchase of 26% stake, with an escrow mechanism set up for additional 34% under call/put options to be exercised linked to achievement of certain milestones. In addition, the parties had agreed to call/put options for the balance stake to be exercised on achievement of defined milestones.

Max Healthcare has now acquired the aforementioned 34% stake in Eqova consequent to contractual obligation of the Company to acquire equity shares of Eqova upon exercise of put option by one of the shareholders of Eqova pursuant to option agreement entered into by the Company, Eqova and such shareholder of Eqova on 10 February 2022.

Eqova has an agreement with Nirogi Charitable and Medical Research Trust in the form of an exclusive and long-term medical services agreement (MSA), under which it has the right to aid development of and provide medical services to a 400 bed hospital to be built on 2.1 acres of Society's land situated at Patparganj, Delhi.

The MSA is valid for an initial term of 30 years from the signing date (as defined in the MSA) and shall be extended in accordance with the terms of the MSA.

Under phase 1, 250 beds are expected to be commissioned in FY26 and the hospital will have high end medical programmes such as oncology, organ transplant and offer multi-disciplinary care in the area of cardiac sciences, neurosciences, renal sciences, etc. 150 beds will be operationalized in phase 2 after commissioning of the phase 1.

The hospital, once fully operational, shall directly employ approximately 2,000 people and provide free treatment to approximately 60,000 patients belonging to the economically weaker section annually in its inpatient and out-patient departments. Through this hospital, Max Healthcare will cater to the quality healthcare needs of the East Delhi community.

Max Healthcare has right to appoint majority of directors on the Board of Eqova and now holds 60% of the paid up equity share capital of Eqova. Further, the Company and the remaining shareholders of Eqova have certain call and put option for the balance 40% equity stake of Eqova, as per terms of the SHA executed between Eqova, Company and shareholders of Eqova.

Max Healthcare Institute (MHIL) is one of India's largest hospital chain (considering only income from healthcare services) in fiscal 2022. MHIL has major concentration in North India consisting of a network of 17 healthcare facilities.

The healthcare services company's network PAT rose 7% to Rs 269 crore on 13% increase in network net revenue to Rs 1,478 crore in Q3 FY23 over Q3 FY22.

The scrip fell 1.80% to end at Rs 471.45 on the BSE yesterday.