Aster DM – A Share Buyback Plan At Right Time

Aster DM - A share buyback plan at right time

Aster DM healthcare, the Dubai headquartered healthcare services provider, plans to buyback shares from its shareholders.

The company, founded in 1987 by Azad Moopen who hails from Kerala, India, has convened the Board of Directors meeting on January 9 to consider the proposal to buyback its equity shares.

Markets seem to have sniffed the share buyback announcement just in time.

The share price of Aster DM rallied over 1% in falling markets.

Broader indices dropped nearly 2% on geopolitical concerns.

Aster DM’s strong financial strength and revenue growth guidance will enable the healthcare services provider to fund its buyback plan.

The company is eyeing 25% of its total revenues from India operations in the next 3-5 years as it undertakes a slew of initiatives to scale up its business in the country.

The Dubai-headquartered firm operates 13 hospitals and eight clinics in India.

Aster DM Healthcare posted Rs 7,963 crore in revenue from operations for the fiscal year 2019.

Around 85% of this was from GCC countries and around 15% from India operations.

It plans to increase the capacity utilization of its facilities in India from the current 60% to up to 75% which is optimum.

It will make significant improvements in revenue.

The company has announced plans to open two hospitals in Bengaluru, which together will add around 1,000 beds.

Besides, the upcoming hospital in Chennai will add another 500 beds.

It is also entering into the diagnostics segment in India.

Aster DM Healthcare is a leading healthcare services provider across GCC (Gulf Cooperation Council) countries with businesses in hospitals, clinics, and pharmacy verticals.

It is the third-largest player in the healthcare segment in India by market capitalization.

Net net we understand that the near term price movement for Aster would depend on the buyback price and the quantum of the buyback offer

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