Bangalore-based cancer care network HealthCare Global Enterprise Ltd (HCG) is planning to expand its network from the present 26 centres to 40 centres by the year 2014 for an investment of Rs 100 crore. It would raise around Rs 50 crore from private equity while the rest is expected to come from internal accruals, said a senior executive from the company.
The company at present has around 24 centres across India and one each in Uganda and Nairobi. It plans to open around four to five centres in metro cities, while around 10 would be set up in tier II, tier III cities, by 2014, said Dinesh Madhavan, director - marketing, HCG.
“The investment in each centres may vary according to the model we choose including tie up with oncologists to setting up a full-fledged centre. We are planning to invest Rs 50 crore from internal accruals and to raise another around Rs 50 crore from private equity for this,” he said. A full- fledged centre could cost Rs 20 crore for the company, owing to the higher cost of sophisticated equipment and technology that such a facility requires.
Already, Premji Invest, the private equity fund of Azimji Premji, Milestone Religare and Evolvence India Life Sciences Fund have together invested an aggregate amount of around Rs 150 crore in the company.
“We have different options to raise funds, from private equity players, from our technology partners or oncology experts who are in partnership with us,” said Madhavan.
The company would also go in for an initial public offer (IPO), by 2014, and according to the present estimates, we will raise funds to the tune of around Rs 500 crore through an IPO. However, plans are yet to be finalised.
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It is also exploring owning and managing opportunity in tie-ups with major hospitals; to own an oncology division in the hospital or to manage the hospitals’ oncology division with its expertise. Various measures including an EMI scheme are designed by the company to provide cancer care at affordable cost. Its tie-up with technology developers and equipment manufacturers also help it to reduce cost of treatment, he said.
Established almost five years back, the company present has around Rs 350 crore revenue at present. It envisages the revenue to grow to Rs 500 crore by 2014, by the time it would launch IPO. However, limited number of oncology specialists along with lack of skilled manpower in clinical and paramedical staff, are the challenges the company faces at present.