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Fortis Healthcare, which is turning its focus for future growth to the Indian healthcare market, is looking at a potential bed capacity of around 10,000 beds from its currently operational capacity of around 4,000 beds, in future. The company is expecting its business portfolio to continue with 80% domestic business and 20% international business, while the ratio was 50:50 some time back, said Vishal Bali, Group CEO, Fortis Healthcare Limited.
'We can have around 10,000 beds in the system, of which around 4,000 beds is our current capacity. We will be increasing the capacity within the existing facilities and would look at green field,' said Bali.
While he refused to put any timeline to reach the 10,000 beds, Bali said that this year itself the company would be adding around 1,500 beds. Three hospitals - Gurgaon, Chennai and Ludhiana - are expected to be operational soon.
Under the asset light model of the company, the investments into infrastructure, land and civil works would be carried out by the Religare Health Trust, which has an investment mandate to principally invest in medical and healthcare assets and services. Fortis would only have to invest around 30% of the expected investment, which would reduce the burden of investment from the company.
A recent investor presentation from the company says that almost 80% of the potential bed additions, that is around 4,600 beds, would be from installed capacity and would be brownfield expansion while the green field expansion would be of around 1,100 beds. While the operational beds are around 4,100, the potential bed capacity for Fortis' Indian operations is around 9,800 beds, it added.
It further added that the majority capital expenditue is based on asset light model, in which the capex of Fortis would be primarily towards medical equipment. The low investment and faster turnaround time is expected to improve return metrics and profitability.
On August 20, the company announced that one of its step down subsidiaries based out of Singapore, Fortis Healthcare International Pte, has completed divestment of its entire holding in its Vietnamese subsidiary Fortis Hoan My Medical Corporation, VOF PE Holding2 and Swindon to Viva Holdings Vietnam (Pte) for an aggregate consideration of $80 million.
In the end of May, this year, the company has also completed divestment of its stake in Dental Corporation, Australia for around 270 million Australian dollars and the proceeds were used for debt reduction.
The divestments helped the company to trim down the net debt equity ratio from almost 1.2 to 0.6. With this, the domestic business has grown to almost 70-80% of the total business of the hospital major. It is planning to maintain the domestic, international business ratio at around 80:20, said Bali.
As on June 30, 2013, the company's Gross Debt was Rs 3900 crore and net debt was Rs 3284 crore. Since then, Fortis has closed the divestment of its Hoan My asset, in Vietnam, for $80 Mn, which in turn would enable further debt reduction, added the company officials.
