International Finance Corporation (IFC) is investing $25 million (Rs 134 crore) in Chennai-headquartered Ravindranath GE Medical Associates Pvt Ltd (RGE), which operates a chain of hospitals in Chennai, Hyderabad, Bangalore and Mumbai under the Global Hospitals brand.
IFC’s investment includes a mix of debt and equity as a portion of the money will be infused as equity.
Global Hospitals will use the funds for capital expenditure for its existing facilities and also to part-finance its $60 million project. It seeks to increase the number of beds from the current 1,000 to 1,800 in FY16 in its existing hospitals besides rationalising capital structure by refinancing existing borrowings.
Founded in 1998, RGE operates a chain of five hub hospitals and three spoke hospitals, with around 1,000 operational beds. It also operates telemedicine centres at seven locations in India, including three in low-income states in the east and the north-east where local tertiary care access is limited.
Dr K Ravindranath, promoter of the company, is a specialist in gastroenterology and laparoscopic surgery. He has more than three decades of experience in the healthcare sector.
The firm is backed by a fund managed by Everstone Capital Management and Samsara Capital, which together invested $73.8 million in Global Hospitals in July 2007. In April that year, the firm acquired Chennai-based Sri Kanchi Kamakoti Sankara Hospital for $59.76 million.
For IFC, the private sector investment arm of the World Bank Group, this is the second investment in the healthcare space this year. Last month, it invested $100 million in Fortis Healthcare Ltd and previously invested in Fortis’ diagnostics chain subsidiary SRL besides the flagship holding company for the financial services business Religare Enterprises.
Other large size investments in the sector include Manipal Health Enterprises raising $180 million from India Value Fund and Quality Care India raising $110 million from Advent International, among others. PE deals in the healthcare space hit an all-time high in CY2012, bucking the overall trend in the Indian private equity funding landscape.
(Edited by Sanghamitra Mandal) Leave Your Comment