KMCH Approves Slump Sale of Allied Health Sciences Division for ₹84.54 Lakhs
Kovai Medical Center and Hospital's Board approved the slump sale of its Allied Health Sciences division to Dr NGP Research and Educational Trust for Rs. 84.54 Lakhs on 11th May, 2026. The AHS division, part of the Education Services segment, contributed Rs. 396.37 lakhs in turnover and Rs. -339.13 lakhs in net worth for FY 31.03.2025. The transaction is a related party deal conducted at arm's length, driven by enhanced regulatory requirements under the National Commission for Allied and Healthcare Professions Act, 2021, with completion expected by 30th November, 2026.
*this image is generated using AI for illustrative purposes only.
Kovai Medical Center and Hospital Limited's Board of Directors, at their meeting held on 11th May, 2026, approved the transfer of its Allied Health Sciences (AHS) Courses division on a slump sale basis to Dr NGP Research and Educational Trust, a public charitable trust engaged in running educational institutions including medical and allied health science courses. The board meeting commenced at 05:00 PM and concluded at 05:45 PM. The proposed transaction is subject to requisite consents, permissions, and approvals as may be required under applicable laws.
Transaction Overview
The slump sale involves the transfer of the company's permission for conducting AHS courses, along with identified assets, liabilities, students, employees, contracts, and related operational elements, on a going concern basis and on an as-is-where-is basis. The transaction is classified as a related party transaction and is being conducted on an arm's length basis, supported by an independent valuation report. The proposed sale is outside any Scheme of Arrangement and does not attract the threshold limits prescribed under Section 180(1)(a) of the Companies Act, 2013 read with Regulation 37A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Key transaction details are summarised below:
| Parameter: | Details |
|---|---|
| Transaction Type: | Slump Sale (Going Concern Basis) |
| Buyer: | Dr NGP Research and Educational Trust |
| Cash Consideration: | Rs. 84.54 Lakhs |
| BTA Execution Date: | On or before 31.05.2026 |
| Expected Completion: | By 30th November, 2026 |
| Related Party Transaction: | Yes, at arm's length |
| Shareholding Pattern Change: | None |
AHS Division Financial Contribution
The AHS Courses division forms part of Kovai Medical Center and Hospital's Education Services segment. The company operates in two segments — Healthcare Services and Education Services. The financial contribution of the AHS division for the financial year ended 31.03.2025 (last audited) is presented below:
| Metric: | AHS Division | % of Company Total |
|---|---|---|
| Turnover: | Rs. 396.37 lakhs | 0.29% |
| Net Worth: | Rs. -339.13 lakhs | -0.31% |
For context, the company's total net worth for FY 31.03.2025 (last audited) stood at Rs. 1,08,532.05 lakhs, and total turnover for the same period was Rs. 1,37,111.30 lakhs.
Buyer Profile and Promoter Interest
Dr NGP Research and Educational Trust is a public charitable trust established in the year 1990, presently running educational institutions in the fields of Health Sciences, Arts & Science, Engineering & Technology, Teacher Education, and a CBSE-affiliated school. The Trust's net worth for FY 31.03.2025 (last audited) is Rs. 29,031.57 lakhs, and its total income for the same period is Rs. 18,408.24 lakhs.
The following Promoter/Promoter Group directors of Kovai Medical Center and Hospital are interested as trustees of Dr NGP Research and Educational Trust:
- Dr. Nalla G Palaniswami (DIN: 00013536) — Managing Director
- Dr. Thavamani Devi Palaniswami (DIN: 00012135) — Joint Managing Director
- Dr. Arun N Palaniswami (DIN: 02706099) — Executive Director
- Dr. Purani P Palaniswami (DIN: 02707233) — Director
- Dr. Mohan S Gounder (DIN: 02479218) — Director
Rationale for the Divestiture
The proposed transaction is driven by enhanced regulatory requirements introduced under the National Commission for Allied and Healthcare Professions Act, 2021, which mandates additional investment in infrastructure and resources for conducting AHS courses. In line with its strategic focus on core medical education programmes and medical care activities with higher resource efficiency and returns, Kovai Medical Center and Hospital has decided to transfer the AHS Courses division to Dr NGP Research and Educational Trust. The Trust, being an established public charitable institution with experience in running educational institutions including medical and health sciences education, is considered well-positioned to continue such courses. The company has stated that the proposed transaction is in the best interests of the company and the students pursuing AHS courses, and there will be no change in the shareholding pattern of the company as a result of this transaction.
Historical Stock Returns for Kovai Medical Center Hospital
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.52% | +0.04% | +3.14% | +3.14% | +3.14% | +255.40% |
How will Kovai Medical Center redeploy the capital and resources freed up from the AHS division divestiture to strengthen its core Healthcare Services segment?
Could the regulatory pressures from the National Commission for Allied and Healthcare Professions Act, 2021 prompt Kovai Medical Center to divest other non-core education assets in the near future?
Given that the AHS division carried a negative net worth of Rs. 339.13 lakhs, how might this transaction positively impact the company's overall profitability and return on equity metrics going forward?
15
Access 50+ Readymade Screeners 
Use 200+ Custom Filters 
Get Full Market Insights 
