KIMS signed an exclusive O&M contract for a 183-bed hospital in Kakinada and, 26 days later, agreed to buy up to 51% of it. Its filings on four such hospitals are a price list for what an operator pays to convert a management contract into ownership.
On 6 October 2026 Krishna Institute of Medical Sciences approved stakes in four Indian hospitals it already operates under O&M contracts, each priced off a BDO Valuation Advisory report dated the day before. At the only profitable one, Sarvottam in Kakinada, KIMS takes up to 51% for up to INR 80 crore cash 26 days after signing an exclusive O&M that pays KIMS 9% of net revenue: about 22 times FY26 profit on our arithmetic. Two loss-makers take minority primary capital, and the third is bought in tranches over up to two years. For a hospital owner running under a management contract, in India or the Gulf, the lesson is that the O&M decides who the buyer will be before any valuer is appointed.
What a board member needs before the next meeting on this.
- Contract first, control 26 days later. KIMS signed an exclusive five-plus-five-year O&M with Sarvottam on 10 September 2026 and approved buying up to 51% on 6 October, on our count 26 days apart.
- About 22 times profit for control. Up to INR 80 crore for 51% values Sarvottam at up to about INR 157 crore on our arithmetic: roughly 22 times corrected FY26 PAT of INR 7.06 crore and 3.1 times book.
- Loss-makers got capital or a staged sale. Sangli took INR 15 crore for 6% and Splendid up to INR 40 crore for up to 22%, both as new money. Insignia is bought in tranches over 12 to 24 months. Only the profitable hospital sold control at once.
- The fee makes the operator the natural buyer. At Sarvottam, 9% of FY26 turnover is about INR 7.6 crore on our arithmetic, roughly the year's whole profit. A third party pays that fee; the operator receives it.
On 6 October 2026 the board of Krishna Institute of Medical Sciences, the listed Indian hospital chain, approved stakes in four hospitals it already runs under operations and management (O&M) contracts, each priced off a BDO Valuation Advisory report dated 5 October (KIMS Reg 30 filing, Sarvottam).
The next day KIMS corrected three of the financial figures in those filings (KIMS correction, 7 October 2026). Read together, the four disclosures are a rare public price list for what an operator pays to turn a management contract into ownership. For a hospital owner, they also show what the contract settled before any valuer was appointed.
The contract came first, the equity 26 days later
On 10 September 2026 KIMS signed an exclusive O&M agreement with Sarvottam Health Care, owner of the 183-bed Trust hospital in Kakinada, for an initial five years extendable by five, giving KIMS "exclusive supervision and control" of the hospital for a fee of 9% of net revenue (KIMS Reg 30 filing, 10 September 2026).
On 6 October KIMS approved buying up to 51% of the same company for up to INR 80 crore in cash, to complete by 31 October 2026 (KIMS Reg 30 filing, Sarvottam). On our count, that is 26 days from contract to control.
What the profitable hospital fetched
Sarvottam reported FY26 turnover of INR 84.83 crore and net worth of INR 50.30 crore (KIMS Reg 30 filing, Sarvottam), and PAT of INR 7.06 crore after KIMS corrected the INR 70.55 crore first filed (KIMS correction).
On our arithmetic, INR 80 crore for 51% values the whole company at up to about INR 157 crore: roughly 22 times FY26 PAT, 1.8 times turnover, 3.1 times book and about INR 86 lakh a bed.
The filing does not say whether the shares are new or bought from existing holders, so this is an equity value, and it nets out no debt we cannot see.
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Loss-makers got capital or a staged sale
The other three are priced differently. KIMS will put INR 15 crore of new money into Ushahkal Abhinav Specialty Hospital LLP in Sangli, a 316-bed hospital with FY26 turnover of INR 80.42 crore and a loss of INR 23.59 crore, for 6% (KIMS Reg 30 filing, Sangli); on our arithmetic that is a post-money value of about INR 250 crore, or roughly INR 79 lakh a bed.
It will invest up to INR 40 crore for up to 22% of Splendid Hospitals in Kompally, which turned over INR 1.39 crore in FY26 at a loss of INR 8.92 crore (KIMS Reg 30 filing, Splendid), implying up to about INR 182 crore post-money on our arithmetic.
For Insignia Healthcare, the 150-bed KIMS-Sikhara hospital in Guntur, KIMS will creep to 51% over 12 to 24 months, paying INR 30.35 a share now and later tranches at fresh independent valuations (KIMS Reg 30 filing, Insignia); its corrected FY2024-25 figures are turnover of INR 9.68 crore and net worth of INR 24.3 crore (KIMS correction).
On our reading, the profitable hospital sold control for cash at once, the loss-makers took minority capital or a staged sale re-priced at each tranche, and the operator kept its route to the rest.
The operator can outbid everyone
This is the point an owner tends to miss. At Sarvottam, 9% of FY26 turnover is about INR 7.6 crore on our arithmetic, roughly the whole of that year's PAT, using turnover as a proxy for the contract's net revenue. To a third-party buyer that fee is a cost that comes off earnings, and under an exclusive contract of up to ten years it cannot easily be removed.
To the operator it is income earned on all of the hospital's revenue while it owns 51% of the equity. On our reading, that makes the operator the natural buyer and, for the life of the contract, close to the only serious one. An owner who signs an exclusive O&M without agreeing how a later equity sale will be priced gives that position away at signing.
No regulator stood in the way
Each of the four filings states that no governmental or regulatory approval is required and that the deal is not a related-party transaction (KIMS Reg 30 filing, Splendid). For these targets the gate was the valuation report and the board, which is why the terms of the O&M carried so much weight.
Four questions before a hospital owner signs an exclusive O&M
- If we sell equity during the contract, who appoints the valuer, and is the operator's fee added back to earnings before the price is struck?
- What would a buyer other than the operator pay for this hospital with the fee running for the rest of the term?
- Does the contract give the operator a right of first refusal or an option over our shares, and on what price basis?
- Can we terminate or re-tender the contract if we sell control to someone else, and at what cost?
The Monday work for any owner running a hospital under a management contract, in India or the Gulf, is in the contract. Read it for exclusivity, term, termination rights and the fee base, then ask what a buyer other than the operator would pay for a hospital carrying that fee for the remaining term.
Then write the equity terms in while a competing operator could still be signed instead: a valuation method, who appoints the valuer, and whether the fee is added back. That is where our business valuation practice starts.
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