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Hyderabad-based Rainbow Children's Hospital, which is in the process of establishing new childcare hospitals in the south, is looking at fund raising from the existing investor and also unlock bank debt.
The exclusive child healthcare network, which has an operational 700 beds in three south cities now, expects the bed strength to reach 1,100-1,200 by 2018. As part of its expansion, it is in the process of establishing a second hospital in Bengaluru and would enter Chennai and Visakhapatnam with a total bed strength of over 400.
It is also considering opening two 150-bedded hospitals, each in Pune and Jaipur, for which it had completed the preliminary feasibility studies.
The hospital chain plans to invest Rs 200 crore in the next two years through a mix of bank debt to the tune of Rs 75 crore and internal accruals from its existing operations in Hyderabad, Vijayawada and Bengaluru.
While the UK-government’s CDC Advisers Private Limited had last year infused $18 million (Rs 100 crore) to support the expansion, for a 21 per cent stake in the hospital, Rainbow managing director Ramesh Kancharla said it might approach them for additional funding of Rs 60-70 crore or from “someone who can fund debt as well as equity to that extent” to set into motion plans for Pune and Jaipur.
The promoters hold majority 79 per cent stake in the hospital, and Kancharla said they would not dilute much, and more likely consider partnering with institutions rather than the profit-driven PE investors.
“We don’t want to dilute too much as we have a long journey to follow. We want to be in the driver’s seat and want an investor who is philosophically attached with us. Though we got 20 per cent premium valuation from some of the investors last time, we stuck to CDC as they are more supportive,” he said.
When asked whether CDC would infuse fresh funds in Rainbow, its south Asia head N Srinivasan said, “if the balance sheet is adequately clear and there is a need for funds, CDC would consider additional equity.”
CDC has interest in Bengaluru-based Narayana Hospitals.
