1. TPG Growth V SF Markets Pte. Ltd. 2. Waverly Pte. Ltd. 3. Asia Healthcare Holdings Pte. Ltd. — Combination C-2024/01/1102

Notice under Section 6(2) of the Competition Act, 2002 given by TPG Growth V SF Markets PTE. Ltd., Waverly PTE. Ltd., Asia Healthcare Holdings PTE. Ltd.

CORAM:

Mr. Anil Agrawal Member

Ms. Sweta Kakkad Member

Mr. Deepak Anurag Member

Order under Section 31(1) of the Competition Act, 2002

1. On 11 January 2024, the Competition Commission of India (Commission) received a notice (Notice) under Section 6(2) of the Competition Act, 2002 (Act), given by TPG Growth V SF Markets PTE. Ltd. (Growth V), Waverly PTE. Ltd. (Waverly), Asia Healthcare Holdings PTE. Ltd. (AHH) [Growth V, Waverly, and AHH are collectively referred to as Notifying Parties].

2. The proposed combination relates to: (a) the acquisition of fresh Redeemable Preference Shares (New RPS) in AHH by Growth V and Waverly (Part I) and (b) the subsequent acquisition of majority shareholding in the Asian Institute of Nephrology and Urology Private Limited (AINU) by AHH (Part II) [Part I and Part II are collectively referred to as Proposed Combination].

3. The Notice was filed pursuant to the various agreements such as the Securities Subscription Agreement (SSA) and Amended Shareholders’ Agreement read with the first Deed of Adherence, each dated 10th January 2024 for Part I; and Amended and restated Share Purchase Agreement(s) and Amended Investment Agreement each dated 10th January 2024 for Part II.

4. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, vide letters dated 24 January 2024 and 12 February 2024, certain information and clarifications were sought from the Notifying Parties. The Notifying Parties submitted their response vide response dated 31 January 2024 and 16 February 2024.

5. Growth V, an investment fund, is managed and controlled by TPG Inc. (TPG), a diversified global investment firm. TPG controls the TPG Group, which employs various strategies like buyouts, growth & tech investing, and impact investing across sectors such as finance, technology, consumer goods, travel, media, real estate, and healthcare. Additionally, TPG holds a controlling stake in New Quest Capital, a private equity firm with investments spanning across multiple sectors such as finance, travel, and real estate.

6. Waverly, a Singapore-based private limited company, is wholly owned by Lathe Investment Private Limited, which is wholly owned by GIC (Ventures) Pte Ltd. Waverly operates as a special purpose vehicle within a group of investment holding companies managed by GIC Special Investments Private Limited (GICSI). GICSI, established as the private equity and infrastructure arm of GIC Private Limited, manages investments in private equity, venture capital, and infrastructure, and is fully owned by GIC Private Limited. Both GIC Ventures and GICSI are owned by the Minister for Finance, under the Minister for Finance (Incorporation) Act 1959. As GIC Ventures is fully owned by the Minister for Finance, it serves as Waverly's ultimate parent entity, and the term "GIC Group" encompasses the investment holding companies managed by GICSI.

7. AHH, a company incorporated in Singapore, is primarily engaged in long-term investment holding activities and through its direct/indirect subsidiaries, is active in providing healthcare services in the field of maternal, child, and other related healthcare services in India. AHH is jointly controlled by the TPG Group and Waverly.

8. AINU, a single-specialty center based in South India, is focused on providing healthcare services through hospitals, specializing in (i) urology (ii) nephrology, and (iii) dialysis and kidney transplant. It also provides radiology and pathology services to their patients. It has seven hospitals located across Hyderabad (including Secunderabad), Vishakhapatnam, Siliguri, and Chennai, which provide primary, secondary, and tertiary healthcare. The Commission noted that as per the consolidated financials of AINU for the financial year 2022-2023, its total assets and turnover are only INR 144 crore and INR 150 crore, respectively which indicates its limited presence.

9. With regards to the identification of the overlaps, Notifying Parties have submitted that, based on the scope of services and limited nexus to India, the GIC Group has not considered inter alia investee companies that (a) have revenue from India of less than a certain de-minimis amount (INR 2 crores); or (b) are not engaged in healthcare services or operating healthcare facilities (including hospitals), or (c) have small/incidental revenue from services pertaining to Urology, Nephrology, Andrology, Anaesthesiology, Pathology, and Radiology; being less than 5% of the total revenue of the company; or (d) are purely debt investments.

10. At the outset, it's important to note that the Commission hasn't specified any of the criteria mentioned above for identifying overlaps. Instead, it has been observed that the presence of overlaps, whether horizontal or vertical or complementarity between the activities of two or more enterprises, is determined by the scope of activities undertaken by these enterprises. This determination is not influenced by categorizing the enterprise into a specific sector or industry, its size, revenue contribution from a particular activity, etc. The Commission has noted that while these factors may be relevant for assessing the potential impact of the Proposed Combination on competition, they do not negate the need for identifying overlaps. However, considering the facts of the case, the Commission has not gone further into this aspect.

11. The Commission observed that TPG Group, through AHH (i.e., health care service providers, ‘Nova’ and ‘Rhea’), Cloudnine, Dr. Agarwal, CARE Hospitals, and Manipal Health Enterprises Private Limited (MHEPL) (including AMRI Hospitals Limited (AMRI)), is engaged in the provision of healthcare services through hospitals which are operating at primary, secondary, tertiary, and quaternary levels and exhibit certain overlaps with the health care activities provided by AINU through its hospitals.

12. The Commission in its past decisions noted the market for the provision of healthcare services through hospitals (Broad Hospital Market) is the broadest. Further, the Broad Hospital Market can be broadly segmented into:

(a) Primary Care: Primary care is the first level of healthcare that patients receive and covers all essential healthcare services. Primary healthcare providers are not specialists in any particular disease area but act as the first point of contact for patients when they have medical needs or concerns, such as illness or injury.

(b) Secondary Care: Secondary care services are usually based in a hospital or clinic and may include planned operations, specialist clinics such as cardiology or renal clinics, or rehabilitation services such as physiotherapy. Secondary healthcare includes a wide range of specialists such as cardiologists, obstetricians, dermatologists, pediatricians, gynaecologists, etc.

(c) Tertiary Care: Tertiary care, is a level above secondary health care, that may be defined as highly specialised medical care, usually provided over an extended period of time, that involves advanced and complex diagnostics, procedures, and treatments performed by medical specialists in state-of-the-art facilities.

(d) Quaternary Care: Quaternary care is defined as an extension of tertiary care in reference to advanced levels of medicine which are highly specialized and only offered in a very limited number of national or international centers. This level of health care includes transplants such as heart transplants, bone marrow transplants, liver transplants, etc.

13. The Commission considered the Broad Hospital Market and primary/secondary/tertiary care segments in each overlapping city, and at a pan-India level for the quaternary care segment for assessment. However, the Commission decided to leave the exact delineation of the relevant market(s) open as it was observed that the Proposed Combination is not likely to cause an appreciable adverse effect on competition in any of the relevant markets as given in the subsequent paragraphs.

14. With regard to vertical linkages, the Commission observed that there are no direct vertical relationships between Growth V and AINU. However, one of the TPG Group entities, namely, API Holdings Limited (API) is engaged in the business of wholesale sale and distribution of pharmaceutical products, medical devices, and OTC products. On the other hand, AINU is engaged in the business of providing specialised healthcare services through its seven hospitals mentioned supra.

15. The Commission noted that the combined market share of Notifying Parties and AINU is in the range of [0-5]% and the incremental market share is also insignificant in all of the relevant markets/segments. Further, with regard to vertical linkages, mentioned supra, the market shares of API or the AINU as the case may be in their respective areas of activities are also not such which can cause any adverse effect on competition. Further, all of these segments/sub-segments/areas of activities are characterised by the presence of many players such as Apollo Hospitals, Max Healthcare, Manipal Hospitals, Fortis Healthcare, Narayana Hrudalaya, etc., besides many smaller healthcare service providers.

16. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India in any of the relevant market(s), and therefore, the Commission hereby approves the Proposed Combination under Section 31(1) of the Act.

17. This order may be revoked if, at any time, the information provided by the Notifying Parties is found to be incorrect.

18. The information provided by Notifying Parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

19. The Secretary is directed to communicate this order to Notifying Parties accordingly.