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Manipal Hospitals may invest around $240M to more than treble bed capacity in three years

07 October, 2013

Bangalore-based Manipal Health Enterprises Ltd, the third-largest hospital chain in India, is planning to invest up to Rs 1,500 crore (around $240 million) to have a capacity to operate up to 5,000 hospital beds, top executive of the company told VCCircle.

“We plan to have total capacity of around 5,000 hospital beds, existing and potential, in India and abroad by 2015-16. When I say potential, it means that in some of our investments we start off with say a 200-bed capacity but have the option to increase it to say 300 beds. Of this, around 3,500-4,000 beds will be in India and 1,000-1,500 beds will be outside India,” said Rajen Padukone, MD & CEO of Manipal Health Enterprises.

These extra beds mean the company could add 7-12 more hospitals in its network. At present the company has 10 hospitals with 1,600 operating hospital beds under its network which include academy cum hospitals as well as corporate hospitals.

“The total investment for our three-year expansion is around Rs 1,500 crore but it’s a bit up in the air and could change depending on the kind of models we look at besides acquisitions. For example, there are a number of developers who are looking to invest with us and in such a scenario up to 40 per cent investment could come from them,” he said.

Further, the expansion of the company would be through brownfield, greenfield and acquisition routes. Padukone said overseas, the company could focus more on acquisitions.

Manipal recently acquired a 72-bed hospital in Malaysia.

“The acquisition was finalised a couple of months ago. It is a secondary level hospital in Kuala Lumpur. As part of the deal, we have space to raise capacity at the existing location and eventually shift the business from 72-beds to a 200-bed hospital. The new hospital would be a multispecialty secondary and tertiary facility,” Padukone said.

He said the company is looking to have a capacity of 400-500 beds in Malaysia which includes setting up a hospital in Malacca and one or two more in Kuala Lumpur in three years.

Apart from Malaysia, Manipal is exploring opportunities to launch and acquire hospitals in the Middle East and Africa.

“In South Africa, we are looking at both education and hospital opportunities. In three years we are looking at a capacity of 1,000 hospital beds,” he said.

Padukone explained that the company will expand in three buckets. The first bucket would include increasing capacity in current hospitals; the second bucket includes increasing more hospitals in cities it is present in and the third includes being in contiguous states where it already has presence.

“In our existing hospitals, we feel we could add capacity by 600 more beds. For example, in Manipal hospital in Goa we have added 200 beds and also added 150 beds in various existing hospitals in Bangalore. We will strengthen our presence in cities we are already present; so two more hospitals are coming up in Bangalore. And we will expand in contiguous states such as Maharashtra, Uttar Pradesh and Orissa. We will also look at cities where we have an educational presence like Jaipur in Rajasthan,” Padukone said.

The company has raised and has access to about $200 million from three private equity players that invested in it, including IDFC Alternatives, Kotak Private Equity and India Value Fund.

(Edited by Joby Puthuparampil Johnson)


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Manipal Hospitals may invest around $240M to more than treble bed capacity in three years

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