Metropolis Health eyes acquisition in Gujarat

Having set up a joint venture with Desai Clinical Laboratory in Surat, Mumbai-based diagnostic chain Metropolis Health Services is now eyeing an acquisition in Gujarat.

The company is in talks with a Gujarat-based laboratory as well as one each at Maharashtra and Karnataka, which is likely be finalised at anything between Rs 3 and Rs 8 crore.

The company is also looking at spreading its footprint overseas by setting up its services in the US, Thailand or Vietnam and East Africa. For the proposed acquisitions and expansion, close to Rs 40-50 crore would soon be raised from banks.

The company had received a Rs 35-crore private equity funding from ICICI Ventures for its domestic and foreign expansion last year which has been invested.

In April 2007, the company established its presence in Ahmedabad though its acquisition of Sanket Labs and is now looking to enter Vadodara, Rajkot and Saurashtra in the near future.

"Nearly 60 per cent of our revenues come from western India, which makes it a market with great potential. Gujarat, being one of the most industrial states, is definitely high on our plans," said Ameera Patel, executive director of Metropolis Health Services.

In Surat, the Desai-Metropolis alliance will offer 3,600 hi-end tests, latest technology and services like home health services and hospital lab management.

Nearly 10 per cent of the company's revenues come from its international labs in Dubai, Sharjah, Colombo, South Africa and Cape Town, which is expected to go up to 20 per cent by next year.

Services from its laboratories garner the maximum revenues with 70 per cent whereas those from hospital management and clinical trials make up 20 per cent and 10-12 per cent respectively.

Patel said that although there has not been any organised documentation on the market of laboratories, a study conducted three years ago put the number of laboratories in India at 45,000, which compete in a market size of Rs 10,000 crore.

"There has been a year- on-year growth in the laboratory services business of at least 30-40 per cent, which will see the market size go up considerably," added Patel.