Medi assist healthcare Services Limited announced that Care Ratings Limited has reaffirmed the credit rating for banking facilities availed by its wholly owned subsidiary, Medi Assist Insurance TPA Private Limited. The rating action, communicated through a regulatory filing dated February 10, 2026, covers total credit facilities worth ₹246 crore.

Credit Rating Details

The rating agency maintained its assessment across different facility categories:

The reaffirmation reflects the subsidiary's strong market position and the demonstrated financial and operational support from its parent company. Care Ratings noted that the rating continues to derive strength from the established parentage of Medi Assist Healthcare Services Limited, which itself carries a 'CARE AA-; Stable/CARE A1+' rating.

Strategic Acquisition Strengthens Market Position

A key development influencing the rating assessment was the acquisition of 100% stake in Paramount Health Services & Insurance TPA Private Limited by Medi Assist Insurance TPA in July 2025. This acquisition, valued at ₹412 crore, further strengthens the company's market leadership in the third-party insurance administration industry.

The acquisition was initially funded through multiple sources:

Notably, by January 15, 2026, Medi Assist Insurance TPA had entirely repaid its bridge debt using internal accruals and unsecured loans from the parent company, following Medi Assist Healthcare's ₹198 crore preferential issue.

Business Performance and Market Leadership

The rating agency highlighted the subsidiary's strong market position, with approximately 21.3% market share in terms of premiums under management in the overall health industry as of September 30, 2025. The company demonstrated particularly strong performance in the group insurance segment with ~32.2% market share, compared to ~28.4% in the previous year.

Key operational metrics include:

The company's total operating income grew by 13% year-on-year to ₹667.89 crore in FY25, driven by 11% growth in premiums under management and 24% growth in government business.

Financial Performance and Outlook

Despite the positive rating reaffirmation, Care Ratings noted some challenges affecting profitability. The subsidiary's operating margin declined from above 20% in earlier years to approximately 14.71% and 13.67% in FY24 and FY25 respectively, primarily due to increased software-subscription charges from the parent company and higher employee costs.

In H1FY26, the operating margin further declined to ~10.43% compared to 16.51% in H1FY25, impacted by losses in the newly acquired Paramount TPA subsidiary and integration costs. However, the rating agency expects meaningful synergy benefits over time through enhanced operational efficiencies and improved scale, projecting margin recovery to 12-13% in the medium term.

The stable outlook reflects Care Ratings' expectation that the subsidiary will continue benefiting from its leadership position in the insurance TPA industry, established relationships with major insurance companies, and strong corporate client base. The company's liquidity position remains strong with nil outstanding external debt as of January 15, 2026, and healthy cash flow from operations.

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Medi Assist Healthcare Services Limited has submitted its quarterly compliance report for fund utilization under Regulation 32 of SEBI regulations, confirming adherence to the stated objectives of its preferential issue for the quarter ended December 31, 2025.

Fund Raising and Utilization Overview

The company successfully raised INR 198.00 crore through a preferential issue on October 10, 2025. During the quarter under review, the company deployed INR 148.40 crore toward its primary objective of investing in its wholly-owned subsidiary, Medi Assist Insurance TPA Pvt. Limited, for debt prepayment and repayment purposes.

Fund Allocation and Deployment

The preferential issue proceeds were allocated across two primary objectives. The major portion of INR 150.00 crore was designated for investment in the subsidiary for debt prepayment and repayment, while INR 48.00 crore was earmarked for general corporate purposes.

Unutilized Funds Management

The company has deployed the unutilized proceeds of INR 49.60 crore in liquid mutual funds to generate returns while maintaining liquidity. The funds are invested across four different liquid funds, each earning a return of 0.48%.

Regulatory Compliance and Monitoring

CARE Ratings Limited, appointed as the monitoring agency, has issued its report confirming no deviation from the stated objectives. The monitoring agency verified that all utilization aligns with the disclosures made in the offer document and the extraordinary general meeting resolution dated September 04, 2025.

The company's Audit Committee and Board of Directors reviewed the fund utilization statement at their meeting held on February 06, 2026, with both providing no adverse comments on the deployment of proceeds. The funds were transferred from the escrow account to the company's bank account in two tranches on December 30, 2025, and December 31, 2025.

Corporate Governance and Transparency

The company has maintained full transparency in its fund utilization reporting, with Company Secretary Rashmi B V confirming compliance with all regulatory requirements. The monitoring agency's report indicates that no government or statutory approvals were required for the stated objectives, and no unfavorable events have affected the viability of the fund utilization plans.

The company has a two-year timeline for complete utilization of the raised funds, with the current deployment progressing as per the originally disclosed timeline without any delays in implementation.