Seeking venture capital to the tune of Rs 12.5 cr

Rasheeda Bhagat

Chennai, May 3

The Chennai-based Devaki Hospital is planning to expand and modernise its facilities such as urology, surgical oncology and general cardiology and start open heart surgery.

Dr K.C. Reddy, Chief Executive and chief of the Urology Department, told

Business Line

on Wednesday that for this expansion programme, the hospital is seeking venture capital to the tune of Rs 12.5 crore. "We hope to do at least 300 open heart surgeries every year, targeting a case a day," he said.

Devaki Hospital, which is a listed company (BSE price Rs 16), has gone through a turbulent period in the last couple of years and its management changed hands 18 months ago, with the Madras Medical Care and Health Centre, owned by Dr Reddy and others, and its associates acquiring a 26 per cent in the company.

Dr Reddy said that having put behind "past mismanagement", the hospital was on the road to "good corporate governance." "We've overcome almost 90 per cent of our problems and look forward to a good profitable year ahead."

The hospital was started in 1978 as a private company, went public in 1991 and now has a bed strength of 100. It also has a nursing school which turns out 20 nurses a year. "We want to upgrade and improve this school too with the funds that we raise," he said.

Core strengths

Devaki's core areas of strength are its Nephrology Department, headed by Dr C.M. Thiagarajan, which does about 6 to 8 renal transplants a month. It runs specialised drug trials for specific post transplant immuno-suppressive therapies.

It also has urology, orthopaedics, cardiology, general medicine and ICU care.

"Now that the hospital has reached a general even keel, we want to take it forward. In Urology, we want to go in for laser therapy, including extra corporeal shock wave therapy for the treatment of renal stones (Lithotripsy) and laser therapy for prostrate, tumours and stones. We want to improve the Oncology Department which is headed by Dr Salim Thomas, one of our shareholders, modernise and refurbish the ICU and other departments," he added.

Dr Reddy added that the new management had inherited debts to the tune of Rs 9 crore; "this has now been reduced to Rs 2.75 crore.

"We raised Rs 2.5 crore from additional equity taken by two families in Mumbai and another Rs 2.5 crore as loans."

(This article was published in the Business Line print edition dated May 4, 2006)
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