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Madhumathi D.S.

To limit fresh forays to metros, big cities for now

Bangalore , Nov. 8

Fortis Healthcare says it is scouring the country to expand and don a pan-Indian image. It would, however, limit fresh forays for now to the metros and big cities.

Mr Harpal Singh, Chairman of the Ranbaxy Labs-owned multi-specialty hospital chain, told Business Line that Fortis has been planning to expand beyond its northern base that covers Delhi, Punjab and Haryana.

Without giving details of potential spots or targets, Mr Singh said, "We wanted to concentrate first in north India, which by itself is a very big market. Now that we have reached the critical mass there, we are ready to go anywhere. We are open to all the three models - management, acquisition of existing hospitals as well as greenfield projects. But we will stay with the big cities for another 3-5 years."

The South and Bangalore, even with their density of corporate hospitals, have also been on its radar for a while.

Fortis has spoken of growing to a 25-hospital chain and making investments worth Rs 1,100 crore over a five-year period. In September last year, it acquired the four hospitals of Escorts Health Systems for Rs 585 crore.

Currently, Fortis is awaiting SEBI's approval for its Rs 730-crore initial public offer to divest 56.66 crore equity shares of promoters. The draft red herring proposal was filed on September 29.

The issue, according to Mr Anil Panwar, President-Finance, will refinance the expense on acquiring Escorts hospitals, retire small debts and allow Fortis to make new borrowings for any future acquisitions. "It will bring our debt-equity ratio to 0.3:1 post-issue," he said.

"We also will be in the entire spectrum of healthcare," Mr Harpal Singh said. The group already is present in diagnostics through SRL and in education through a nursing school. Last year, it added to its portfolio a clinical research organisation, Fortis Clinical Research Ltd.

In the past six years, Fortis has grown to a network of 12 hospitals, satellite centres and a boutique women's hospital - which it plans to enlarge into all aspects of women's health. The network adds up to around 1,800 beds for Fortis and in 2005-06 generated a turnover of Rs 443.5 crore.

The focus would be on neurology, gastrointestinal and renal medicine, oncology and diabetes. Among its upcoming projects are two hospitals in New Delhi and a comprehensive health campus called Medicity, also at Delhi, which would include healthcare and educational facilities. A hospital in Jaipur is in the final stages of construction.

For the healthcare industry, Mr Harpal Singh said, "The domestic demand alone is big, while foreign patients travelling for medical care bring the icing on the cake and boost the bottomline. Also driving the growth of the sector are the opportunities in clinical research to support new drug development, testing of new devices and equipment; and new processes and protocols."

More Stories on : Outlook | Medical Institutions & Hospitals

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