Wockhardt may raise Rs 1,000cr

Wockhardt Hospitals is on a major expansion drive. The group, which now has 12 hospitals, aims to widen its network to 30 across the country.

It is expecting to raise about Rs 1,000 crore from the capital market for the pipeline of projects, according to CEO Vishal Bali.

The group has eight super-speciality hospitals and four regional speciality intensive care unit hospitals (ICU) providing healthcare services in western, southern and eastern India.

It operates hospitals in Mumbai, Bangalore, Hyderabad, Kolkata, Nagpur, Surat and Rajkot. Its total income for the fiscal 2007 stood at Rs 236.7 crore. EBITDA and net profit for the same period were Rs 39.43 crore and Rs 15.54 crore, respectively.

The group, which has its focus on cardiology and cardiac surgery, will ride on the strengths derived from these specialities. It will extend the expertise to orthopedics, neurology and neurosurgery, urology and nephrology and critical care, and specialise in minimally invasive surgery.

"The regional specialty ICU hospitals act as referral centres and the first point of critical care for the larger super-speciality hospitals," says Bali.

The cardiac ICU is the backbone of Wockhardt Hospitals. The regional speciality hospitals are also self-sustaining as they are strategically located to fulfil the demand for basic tertiary care and higher secondary care.

While in the case of Wockhardt Hospitals, each critical care bed would cost Rs 40-45 lakh to set up, a multi-speciality hospital on the other hand may need to spend only Rs 30-35 lakh for every additional bed.

India has one bed for every 1,500 people, while the WHO norm is 1:300. Wockhardt has approximately 1,090 inpatient beds in use across its network. It also has ongoing greenfield and brownfield projects, which should result in 1,798 new beds by March 31, 2009.

Expansion plans apart, affordability will play a big role in the success of hospitals. Here, says Bali, "The TPAs will drive growth." With just under 10 per cent insurance coverage, the growth in healthcare is only taking off, he added. Consumer choice will drive the process of reforms in the insurance sector. Transparency in pricing too would be another big factor that will help in the growth and coverage of the healthcare industry, he said.

Bali foresees a slew of products being developed by insurance firms in future that would set limits on what can be spent on a given ailment or surgery and such other products that ensure sustainability of the medical insurance business.

There would also be insurance products which would be event-based and not sum-based.