Metropolis to dilute 10 per cent stake

To acquire 10 labs to expand in north, east.

Metropolis Health Services (MHS), a chain of diagnostic centres, is in talks with global equity investing firms to dilute its stake for raising funds for its expansion.

G S K Velu, managing director of MHS, told Business Standard, "To raise Rs 100 crore the company will be diluting a minority stake to the equity players."

He further added, "We will dilute 10 per cent of our stake to raise the fund for the expansion." The company will complete the process of dilution of the equity in next three months.

Adding to this, Sushil Shah, chairman of MHS, said, "We are in talks with three to four global equity players for raising fund." The company expect that the raising of the fund will be completed latest by August. Last year, ICICI Venture Fund had invested Rs 35 crore for a minority stake in Metropolis. The company had diluted approximately 15 percent stake to ICICI Venture.

The company will be investing Rs 40 crore each for its domestic acquisition and international expansion, while Rs 20 crore will be invested in the expansion of its clinical trial business.

"We are planning to acquire 10 pathology labs for our Northern and Eastern expansion," adds Velu. The company is in the process of identifying the potential pathological Laboratories.

In Northern India, the company had its presence only in Delhi and it plans to expand its presence to tap the northern market. "The company eyes acquisition in four state in Northern India," informed Velu. The states are Uttar Pradesh, Haryana, Rajasthan and Punjab.

While in Eastern India, the company will enter Bihar, Orissa and Jharkhand. The company is in the process of entering West Bengal to set up its first laboratory in Kolkata. "The Kolkata lab will be the main lab and we will be spreading to the adjoining state of WB," adds Velu.

"We plan to pick up majority stake in the labs that we intend to acquire," adds Velu. It may acquire 51 per cent majority stake in the pathology laboratory firms and later on increase it to 100 per cent over a period.

On Wednesday, the company announced its joint venture with a Ahmedabad-based Sanket Diagnostic Pvt Ltd to form Sanket Metropolis. The company opens its first diagnostics centre in Ahmedabad.

Metropolis will start with secondary laboratory in Ahmedabad that will later be upgraded to tertiary laboratory. The company will later spread its presence in South Gujarat, North Gujarat and Saurasthra by setting up primary laboratory.

The company has invested Rs 3 crore in Ahmedabad in last six months and will further pump in another Rs 10 -15 crore in Gujarat.