Manipal Group set to raise $70 mn

IDFC expected to lead the investment round

The Manipal Group is expected to raise $70-$90 million (around Rs 300 crore "" Rs 400 crore) through the private equity route for its major expansion plans. The company is in talks with various investors and according to market information, IDFC is expected to lead the investment round.

The company is expected to pump close to $25 million out of this into expansion of its healthcare business and the remaining in expanding its education business.

This funding is part of an overall gameplan of the group to invest close to Rs 800 crore over the next five years through a mix of debt, external equity and internal accruals.

Ranjan Pai, CEO, Manipal Education & Medical Group said that they are in talks with various private equity funds but it is too premature to comment on it. "We should be clear in a couple of weeks time," he added.

The group has a topline of Rs 800 crore, with 70 per cent coming from the education arm and the rest from healthcare operations. The group on Tuesday announced that it is reorganising its hospitals and education institutions into separate companies to give them more focus.

The education group is also set for a mega-diversification initiative which will see it getting into vocational training in the areas of manufacturing and information technology, besides corporate training.

The Manipal Group has consolidated its healthcare business into the Manipal Health Systems (MHS) and this company is planning a Rs 150 crore expansion, which will see Manipal stepping into the highly comeptitive Delhi and Mumbai healthcare markets. This company currently has 7,000 beds across India and at a couple of overseas locations.

MHS also announced that it has recently acquired Bangalore Children Hospital which will be re-launched as Manipal Speciality Hospital in mid-May. The company also plans to build a hospital near the new international airport at Devanahalli.

"We are in talks to acquire land there and intend to have the deal sealed in the near future," company officials added. MHS today comprises of 11 hospitals, 12 clinics, nine primary healthcare centres and over 55 community health programmes with 1,700 consultant doctors and about 5,000 employees.

After consolidation, MHS hopes to touch a turnover of Rs 1,000 crore in five years and have a combined bed strength of over 10,000. This, according company officials, will make MHS one of the largest healthcare companies in Asia. MHS now manages three integrated systems with hubs at Bangalore, Manipal and Mangalore.

MHS is expected to spend Rs 60 crore for upgrading its equipment. Under the plan, the Airport Road facility in Bangalore will be upgraded to a quarternary level hospital, with which it will be able to do transplants with expertise from University of Minnesota.

Other existing facilities will add more beds and new facilities are being planned in other smetros.