Narayana Hrudalaya has issued a clarification. Read it at the end of the article.
Sutter Health, a multi-billion dollar US-based not-for-profit healthcare organisation, is close to picking up a stake in the Rs 200 crore healthcare city being set up by Narayana Hrudayalaya in Jaipur.
Narayana Hrudayalaya is the renowned cardiac care hospital in India started by cardiac surgeon Devi Shetty and is setting up a chain of healthcare centres across many cities in India called ‘Health City’.
The Rs 300 crore hospital firm currently has 3 hospitals in Bangalore and Kolkata and is planning a chain of similar hospitals at Ahmedabad, Raipur, Jamshedpur, Bhopal and Delhi.
Sources in the company indicate that the deal for Sutter Health to pick up stake in the Jaipur project is expected to be inked by the end of next month.
The Jaipur project is expected to be structured as a special purpose vehicle to divest the stake to Sutter Health.
This is the second scope of interest that Sutter Health has indicated to Narayana Hrudayalaya after the two are understood to be in discussion for a joint venture to set up a 1,000 bed healthcare unit in Mexico.
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Sutter Health, based in North California has a network of community-based healthcare providers in more than 100 Northern California communities. The company did not comment on the deal.
Narayana Hrudayalaya’s Jaipur project is expected to start operating from June 2009 and the first phase is built over a area of 5 acres, close to the airport. The first phase of this project is expected to house 1,000 beds and in the second phase, which is spread over 35 acres, is expected to scale up the number of beds to 5,000 over a period of 5 years.
The second phase is expected to cost Rs 500 crore. Post the Jaipur project, Narayana Hrudayalaya is expected to start on projects at Hyderabad and Jamshedpur.
Each of these health cities will have a 1,000-bed heart hospital and another 3,000-4,000 beds for other specialties like cancer, women and children, neurology. The plan is to start with 5,000 bed hospitals, reaching 20,000 beds in a five-year time span.
Narayana Hrudayalaya has been fuelling these expansion plans by raising Rs 400 crore through the private equity route from JP Morgan and AIG. The company is also understood to raising an additional Rs 500 crore by unlocking its real estate holdings.
According to information available, in addition to having 40 acres in Jaipur, this firm has been offered 37 acres in Ahmedabad by the Gujarat government and 25 acres by a private builder in Delhi.
It is ramping up its Kolkata facility with a new 25-acre campus with 5,000 additional beds. The Tata Trust in Jamshedpur has offered an existing hospital to build a 5,000-bed health city.
Sources close to this firm indicate that the land which Narayana Hrudayalaya has got from various state governments have come in at a subsidised cost and the entire expanse of area may not be put to use to build hospital.
“At the most, a third of the land at various locations is likely to be utilised for building the hospital. The rest can be commercially exploited,” the source noted.
Dr Devi Shetty, through his initiatives, has been bringing down the cost of cardiac surgeries through what he fondly calls the 'Wal-martisation of healthcare,’ by performing close to 30 open heart surgeries and an almost equal number of catheterisation procedures a day, almost eight times the average at other Indian hospitals.
CLARIFICATION
Narayana Hrudalaya has clarified that at present it has no business relationship with Sutter Health, a California-based healthcare organisation.