Matrix Partners India has invested Rs 40 crore ($6 million) in Kerala-based Meditrina Hospitals Pvt Ltd, which focuses on cardiology, to pick a significant minority stake.
The company plans to invest this capital in two years to increase its footprint, Prathap Kumar, founder of Meditrina, told VCCircle.
“We are planning to open specialty in hospitals (SIHs) in Hyderabad and Bhubaneswar in the next few months. A centre of excellence is also under construction in Kollam,” said Kumar.
SIHs are cardiac centres operated by Meditrina in multispecialty hospitals. These centres have two cardiologists and four medical officers. They have around 20 beds and require an investment of Rs 6-8 crore.
Started three years ago, the company operates three SIH centres and one multispecialty hospital in south and central Kerala. Kumar said he decided to build Meditrina for help increasing penetration of technology in cardiac care space in India, availing opportunities in tier II markets and focusing on existing medical infrastructure with an asset light model based on SIH.
“Though we now focus on interventional cardiology, we will soon venture into bypass and allied cardiac care with a world class facility in Kollam. My vision is to expand across India in the near future with a focus on what we do best—providing affordable cardiac care in tier II cities in the country,” he said.
In five years, the company plans to have 20 SIHs supported by two centres of excellence which are super specialty hospitals for cardiac care. These super specialty hospitals will also offer allied services such as nephrology and urology.
“We plan to invest around Rs 150 crore to have 20 SIHs and two centres of excellence,” Kumar said. He said the company would not focus on multispecialty hospitals in the future and does not have any significant expansion plan in that segment.
For further expansion the firm will raise more funds after two years, which would be the time it would take to deploy Rs 40 crore that it has raised.
“We will deploy Rs 40 crore by the end of two years. By then we plan to have at least 10 SIHs and one centre of excellence,” Kumar said.
For this deal, Meditrina was advised by Grant Thornton.
"The capital-efficient cardiac SIH model is a substantial business model innovation in a hitherto highly capital intensive, super specialist therapeutic area,” said Asish Mohapatra, vice president, Matrix Partners India.
“Specialty healthcare services are an important franchise area for Matrix Partners India as they satisfy a growing demand for affordable and patient–centric quality care for Indian consumers and this investment continues to build our healthcare investing franchise in this area,” said Avnish Bajaj, co-founder and managing director, Matrix Partners India.
Matrix Partners India, which has around Rs 3,000 crore under management, has been actively investing in single specialty hospitals targeting eye care, maternity and mother and child care, among others.
The companies it has invested in include Enhance Aesthetics and Cosmetics Studio which focuses on cosmetology, orthopaedic specialty hospital Mewar, Kids Clinic India which focuses on mother and child care, and eye care hospital chain New Delhi Centre for Sight.
Apart from healthcare, Matrix also invests in banking and financial services, entertainment, tourism and education.
Single specialty hospitals have got a lot of investor attention, driven by factors including good return on investment (ROI), easy scalability and low capex requirement. Recent investments in this segment include Rainbow Hospitals getting $16.38 million from Abraaj Capital and CDC Group, Total Dental Care raising $5 million from Asian Healthcare Fund and Harmony Medicare raising around $8 million from India Venture Fund.
(Edited by Joby Puthuparampil Johnson)