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Fortis Malar Hospital has drawn up an expansion plan that will take the hospital chain's bed-strength from 300 to 1,000 over the next 12-18 months. The expansion will involve an outlay of Rs 300 crore.
While Fortis Malar will pump in Rs 60 crore, it is weighing various options to bring in the rest – including raising fresh equity.
The Chennai-based Malar, which was acquired by Fortis in 2007, has cleared most of its Rs 20-crore debt and is ready to expand now, said Mr Krish Ramesh, Zonal Director. Currently, Fortis Malar has two facilities – a 200-bed facility in Chennai and a 100-bed hospital in Puducherry, which Fortis Malar operates and manages.
The company, in a notice to shareholders, has said that Chennai is experiencing “constraints in bed capacity and physical space”. To address this, the Chennai facility will be expanded in 12 months to add 50 beds. The hospital has acquired land adjacent to its existing property and is at an “advanced” stage of discussions with potential collaborators.
By this time, Fortis Malar also expects its second hospital in Chennai to come up. “We have identified a building which will be taken on long lease and converted into a 250-bed hospital. We are on the verge of finalising it,” said Mr Ramesh.
Revenues
South expansion also includes hospitals in Madurai, Coimbatore and Tiruchi – a combination of greenfield projects and acquiring hospitals. The combined bed-strength of these will be 300. The Puducherry hospital will also expand to 200 beds.
Though the next 12 months will see more than a three-fold increase in bed-strength, the hospital does not expect a quantum jump in revenues. Last year, Fortis Malar clocked Rs 85 crore and this year it expects to finish at Rs 110 crore. “When Fortis took over Malar, we were sitting on Rs 11 crore cash loss. We have wiped out most of it; it is just Rs 3-4 crore now and will be wiped out this year. But for revenues to jump, it will take two to three years.”
While Fortis Malar's forte is cardiology, the hospital is looking to expand in oncology, with focus on radiotherapy. “Since this involves radiation, we need a facility with a bunker.”
Currently, Fortis Malar caters to the middle and higher-middle classes. As it moves to smaller towns, the hospital will create a different brand identity for the “slightly lower economic strata”.
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