Fortis Healthcare to raise expansion fund

The largest hospital chain in North India, Fortis Healthcare, is all set to raise its expansion fund between Rs 500 to Rs 600 crore. Through a combination of private placement and initial public offer in the current fiscal, the funds will be raised to meet its ongoing expansion plan.

Shivender Mohan Singh, the Managing Director of Fortis Healthcare refused to comment on the amount and the modality of the proposed issue. He said that the company is looking at the option of raising funds through the equity route.

Three hospitals are being set up by Fortis Healthcare and this will cost over Rs 600 crore. Investment banking sources said that the company would first do a private placement and then tap the capital market.

Fortis, a Ranbaxy promoted Group Company, is spread over North India and National Capital Region. It has a combined bed capacity of 2,000 which is expected to touch 5,000 by 2010. The expansion will be done by increasing the capacity in the existing hospitals and also by setting up new hospitals or through acquisition route. As per conservative estimates, the company will have revenues of around Rs 550 crore in the current fiscal.

It has just launched 200 beds multi-specialty hospitals with capital outlay of Rs 115 crore. It acquired Escorts Heart Institute and Research Centre at an enterprise value of Rs 660 crore last fiscal year. The new hospital will offer high-end tertiary care in 5 disciples- cardiac, renal, diabetes and metabolic diseases, joint replacement, pulmonology as well as thoracic surgery.

Singh said that the company will continue to pursue inorganic growth strategy as well as green field expansion. The company, after capturing North India, is looking forward to capture West and South.

The company is aspiring to create a pan India foot print and leverage the network with the international alliances. Singh said that they are looking at various opportunities including the green field projects.