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Peepul Capital-backed Motherhood to invest over $15M to add new hospitals by FY17 

Peepul Capital invested in Rhea Healthcare, which runs mother and child care hospitals under the brand Motherhood, in March this year.

Peepul Capital-backed Rhea Healthcare Pvt Ltd, which runs mother and child care hospitals under the brand Motherhood, is planning to invest upwards of Rs 100 crore to build five to seven hospitals in two-three years, a top company official told VCCircle.

“We plan to have eight to 10 Motherhood hospitals in our portfolio in 24 to 36 months. Each of them will be roughly 30 to 40 beds,” Rajagopal G, CEO of Rhea Healthcare, said.

At present the company has three hospitals located at Bangalore, Chennai and Hyderabad with a capacity of 30 beds each. Rhea Healthcare will expand in these locations which can have more than two centres each.

“Our plan is to consolidate our position in neighbouring and adjacent markets which are Chennai, Bangalore, Hyderabad and Pune,” Rajagopal said.

The expansion of these facilities will be on an asset-light long-term lease basis. Rhea Healthcare would invest around Rs 15 crore per hospital. Each of these hospitals will have a total staff strength of 200-240 people of which around a fifth will be doctors, including full-time resident doctors, community doctors and Rhea Healthcare’s own full-time appointed doctors.

Rajagopal said Rhea Healthcare is eyeing revenue of Rs 175 crore with eight functional hospitals by 2017. He did not share the latest financial numbers of the privately held company.

Investment from Peepul Capital

Rhea Healthcare has started expanding aggressively after it received an investment from Peepul Capital earlier this year.

“Peepul Capital invested in our company at the end of March earlier this year. It is here for a long stay and has underwritten to support us for the next four to five years in terms of the growth plan we have laid for ourselves. In terms of investment – it will be substantial and so will be the stake it will hold in the company,” Rajagopal said.

He refused to disclose the amount that Peepul is investing in the company. According to reliable sources, a major chunk of Rs 100 crore earmarked for medium term expansion will come from the funds committed by the PE firm.

Speaking about deployment of this capital, Rajagopal said, “We will deploy this fund within 24 months.”

Parenthood JV with BACC

Besides the expansion of Motherhood brand, the company will focus on its joint venture with Bangalore Assisted Conception Centre (BACC) Healthcare Pvt Ltd to run infertility centres under the brand Parenthood.

BACC Healthcare is promoted by Dr Kamini Rao and runs infertility centres under its own brand Milann in Bangalore.

“The first centre of Parenthood was started in Bangalore in September 2012. The expansion of Parenthood will follow the expansion of Motherhood,” Rajagopal said.

However, cities which have more than one centre of Motherhood may only have a single Parenthood centre and these two centres may not be in the same facility or hospital, he said.

Parenthood centres will require relatively lower capital expenditure of around Rs 2-3 crore.

BACC Healthcare got funded by Temasek-backed oncology chain HealthCare Global Enterprise Ltd (HCG) in May this year.

(Motherhood Hospital)

Rhea Healthcare Pvt. Ltd. owns and operates women and child healthcare hospitals and clinics under the brand name Motherhood. It offers obstetrics, gynaecology, neonatology, paediatrics, fetal medicine, fertility, and cosmetology services. The firm also offers yoga and lamaze classes. The company was incorporated in 2008 and is based in Chennai, Tamil Nadu with additional office in Bengaluru and Hyderabad.