Hyderabad-based hospital Krishna Institute of Medical Sciences (KIMS) is eyeing a second round of private equity funding to meet its expansion plans and also to chase acquisition opportunities. The hospital may be looking at raising up to Rs 100 crore to partly fund its Rs 500-600 crore expansion planned for next four years, VCCircle has learnt. A trigger for raising the second round is also its inorganic growth plans as the hospital is believed to be in talks with several smaller players in Hyderabad for consolidation moves.
In December 2009, Milestone Religare had invested Rs 60 crore in KIMS through its India Build-Out Fund 1, a Rs 600-crore private equity fund backed by Religare Enterprises and Milestone Capital.
KIMS plans to add about 1,000 beds in four years by setting up chains of hospitals across the country focussing on Andhra Pradesh and Maharashtra. KIMS plans to set up 7-8 hospitals with a bed capacity of about 150 investing about Rs 80-100 crore for each hospital, Dr Bhaskar Rao, MD & CEO, KIMS told VCCircle.
“We plan our future investments through private equity funding and debt. We are in talks with a few other PE firms but nothing has been finalized,” he added. The hospital, which was founded in January 2004 with 150 beds, has 300 beds currently with a turnover of Rs 200 crore.
Indian healthcare sector has attracted quite a few PE investments in recent times. In 2010, about eight PE/VC deals took place till date with an overall investment of $277 million. In contrast, 2009 witnessed about four deals with an overall investment of $176 million in healthcare service space with the highest investment being Goldman Sachs in Max India.
Dr Bhaskar Rao, who himself is an oncology specialist, plans more oncology clinics across the country. In July 2010, KIMS, joined hands with GE Healthcare and Varian Medical Systems to set up 10 'See & Treat' Oncology with an investment of Rs 200 crore in tier II and tier III towns such as Vijayawada, Visakhapatanam, Bhubaneshwar, Thrissur in Kerala, Pune, Nagpur, Raipur, Indore, Coimbatore and Patna.
The proposed network of centers will have Imaging Systems each for detecting the disease at its earliest possible stage and will be equipped with radiotherapy and radio-surgery technology for treating patients. It is estimated that there are approximately 2-2.5 million cases of cancer in the country.