Sahrudaya Health Care Pvt. Ltd. (2017): Towards A Term Sheet

Ramana Sonti; Lalita Anand

Product #:ISB-311

Supplier:Indian School of Business

Discipline:Finance

Setting:2017

Details:Case (PDF) • 25 pages • 2022-03-24

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Industries:

Healthcare sector

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In 2017, Sahrudaya Healthcare Pvt. Ltd. (SHPL), a successful chain of corporate hospitals based out of Hyderabad, India, approached private equity (PE) firm Samara Capital for a capital infusion. After conducting a thorough due diligence and evaluation of the company, Samara Capital brought its major limited partner (LP) Medicover, a European multinational healthcare and diagnostics company, into the decision-making process. In a surprise turn of events for SPHL, Medicover offered to become a strategic partner and invest in SPHL. With the new proposal on the table, top executives from Samara Capital, Medicover, and SHPL attended a high-level meeting in New Delhi to discuss the modalities of the term sheet.

Learning Objectives

• To introduce students to the concepts of raising capital via private equity with attendant risk and return • To examine a full range of financing alternatives (invoking the pecking order theory, namely internal accruals, angel financing, venture capital financing, debt, private equity, etc. • To attempt firm valuation • To draft a term sheet by assessing the various terms and conditions under which an investment is to be made