HCG to open a dozen more cancer-care centres

It is not often that a cancer hospital chain gets listed in the bourses- especially in India.

On March 16, HealthCare Global Enterprises Limited, known popularly as HCG, is attempting to raise ₹650 crore from the stock markets, which has given its thumbs down to some of the recent IPOs such as Cafe Coffee Day. However, the story seems to be a bit different with healthcare IPOs, which seem to have got investors excited, case in point being Narayana Hrudayalaya, Alkem Laboratories and Dr Lal Path Labs’ issues getting oversubscribed. BS Ajaikumar, Chairman and CEO of HCG, a product of MD Anderson, (a leading cancer care provider in the US), spoke to BusinessLine on how raising money from the capital markets is important to tackle the rising cancer epidemic in the country and HCG’s future plans.

When you started the company in 1989, did you expect to get listed in the stock markets?

When we started off, we were a bunch of doctors trying to solve one of the most pressing challenges of our times — cancer. Keep in mind that in 1989, India did not have any comparable cancer facility to the West. Over a period of time, we have achieved that. Not only are we providing the most modern care but also something that is affordable to large sections of society. Since a couple of years back, when PremjiInvest and Temasek invested in our venture, I started to learn about things like EBITDA.

How does listing in the bourses help?

Let’s look at the scale of cancer in India. As of last year, 39 million people have taken some form of cancer treatment in the country. In 2015, 1.1 million people were reportedly diagnosed of cancer. In our own hospitals, currently, we are able to tend to a fraction of these patients. Every year, we see a 30 per cent rise in the number of patients. Then, you see the other side. Cancer care options are widely available in cities. What about rural areas, tier-II and III cities? At the end of the day, cancer does not distinguish between a rural or urban person. By listing, we can reach wider places. We have plans to open a dozen more cancer centres.

But the cost of cancer care is not coming down..

It will come down over time as more hospitals come in. I say cancer care is the cheapest in this country compared to any other, with same levels of quality. Our efforts are always to bring the cost down. As an example, we recently came up with a PET-CT machine, which we designed along with GE. The PET-CT machine comes with advanced early disease detection capabilities with measurements to understand patient’s response to cancer treatment as well. In a typical Indian entrepreneurial sense, we also looked into how this machine not only helps in the management of oncology cases, but also in cardiology, neurology and inflammatory or infective pathologies. Also, our recent effort of enabling accurate treatment of cancerous cells through targeted dosages, rather than shooting in the dark can aid in better planning, faster delivery and better quality of the treatment. This will reduce the number of sessions required and quantity of dosages too.

India looks like the wild west when it comes to cancer. There is no cancer registry; cancer detecting techniques at a genomics level are at its infancy. How does this play out for HCG?

We have taken efforts to address some of these problems. For instance, we are in the process of creating a new benchmark in cancer care by partnering with Strand Life Sciences for making genomics-based diagnostics.

Sequencing of tumor using next generation sequencing technologies and thorough analysis of individual patient’s DNA variations will help physicians go beyond a ‘one size fits all’ model of cancer therapy. This existing approach has to change and will change.

In your Draft Red Herring Prospectus, you have mentioned usage of technology and geographical expansion as a part of your future plans. Can you elaborate?

Technology can bring the cost down, increase accessibility and reduce hassles. We are working on ways to use technology that can analyse patient data, maintain confidentiality and increase access of it to rural areas. On the expansion front, we are looking at Kenya, Tanzania and Uganda where cancer care is similar to India of the last decade.

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