Manipal Health scouts for strategic investor

Manipal Health Systems (MHS) is on a major expansion spree. The Rs 222-crore group aims to be a Rs 1,000 crore group by 2011. Before that, it expects to end the present fiscal at Rs 320 crore.

The group is looking at organic growth and is in the process of securing the next tranche of funds. It has shortlisted 22 potential investors from across the world, including a few from India, to raise about Rs 300 crore. Among those who have shown interest include one from Malaysia, a Hong Kong-based group, two from Europe, US, and a few from India.

With JM Financial as the merchant bankers, MHS is aiming to rope in groups that can add value to the services offered by its hospitals, said R Basil, chief executive officer and managing director, Manipal Health Systems. The funds should be tied up in another three months, he added.

The group will, in another two-and-a-half to three years, will go in for an IPO.

Major plans include expanding the present hospital on the Airport Road by adding 300 beds and a 400-bed hospital towards the upcoming Bangalore International Airport.

The hospital in Penang in Malaysia will be inaugurated on September 17, while in Mumbai and Delhi, the group is in negotiations with a few trusts that own huge parcels of land for a joint venture.

"In big cities, the cost of the land itself can make up 30-40 per cent of the cost of the project and it could take too long to break-even," said Basil.

The group has set up a 50-bed hospital in Goa and bought a property to build a hospital in Mysore. It plans a greenfield project in Kolkata and is negotiating to buy a hospital in Hyderabad.

"Our focus will be on super-specialities in future," added Basil.