Sahyadri Hospitals, the Pune-based, multi-specialty hospital firm, has shortlisted several strategic and private equity bidders for the second round of its sale process, according to three sources familiar with the situation.

KKR has dropped out of the race, said the first source familiar. Max Healthcare, an India-based hospital operator, has also dropped out, said the second source familiar.

Bidders who are still interested include Temasek-backed Manipal Hospitals, which has mandated Barclays as its advisor, and EQT, said the first and second sources familiar.

Blackstone, through its portfolio company Aster DM Healthcare, and Malaysian strategic IHH Healthcare are also believed to be in the race, said the first source.

Manipal Health Enterprises, which has mandated Barclays and Allegro Advisors for the potential acquisition, is considered the frontrunner, said the first source. The potential buyer, which could seek a USD 1bn IPO, as reported in January, would increase its valuation should it win its bid for Sahyadri, which has a Maharashtra-wide presence, he suggested.

The sale process could close in about three months, said the third source.

Ontario Teachers’ Pension Plan (OTPP), which owns a majority stake in Sahyadri, is selling its stake in the company, as earlier reported. Manipal Health Enterprises, Quality Care India, Max Healthcare, and IHH Healthcare, alongside financial sponsors such as EQT Partners and KKR, reportedly submitted initial bids to acquire the hospital chain operator.

Previous media reports have pegged the bids in the INR 45bn (USD 531.9m) to INR 50bn (USD 591m) range.

Sahyadri, Manipal Health Enterprises, EQT, Blackstone, and Max Healthcare did not respond in time to comment. Barclays and Allegro, advisers to Manipal, also did not respond in time to comment.

KKR and IHH Healthcare declined to comment.