Narayana Hrudayalaya close to raising Rs 300 cr for Cayman Islands project

Narayana Hrudayalaya (NH), the Bangalore-based hospital chain, is closing to raising Rs 300 crore for its 300-bed multi-specialty hospital in the Cayman Islands. NH will raise these funds through a mix of debt and equity with more reliance on the latter.

According to Dr Devi Shetty, the founder chairman of NH, they are in talks with a couple of US-based strategic players to invest in the project. In addition to this, a financial investor will pick up equity besides raising debt.

NH had signed a detailed agreement with the Government of Cayman Islands during April 2010 and is understood to be progressing now after initial hiccups. “All issues are close to being settled and we are progressing on the project,” Shetty added.

The hospital chain, which rose to fame for its cost-effective cardiac surgery, will set up the project in four phases. The first phase spread over 10 acres will house 300 beds and will cost about Rs 400 crore.

The original agreement envisages a total of 2,000 beds at the project in four phases.

In the first phase, the hospital will cater to heart, cancer, ortho and gastrointestinal surgery and will rely on medical tourism, mainly from the United States where the costs are prohibitive.

“Cayman Islands is an hour flight from the US and we intend to offer cost-effective treatment for the citizens of the US and also who are under-insured. We will also cater to the local population,” Shetty detailed.

As part of the four phases, NH envisages a large facility for assisted living, a medical university to train doctors, nurses and paramedical students from American, Canadian, South American and Caribbean region.

Even as Shetty is progressing on this project, he is parallelly working to establish his presence in Malaysia, which is expected to be through an acquisition.

If the funding by NH sails through, it will the second largest fund raising which this hospital chain has effected. During late 2007, it raised $100 million from J P Morgan and AIG by divesting 25 per cent to fuel its expansion plans.

Narayana Hrudayalaya group presently has 5,000 beds in India and aims to have 30,000 beds in the next five years in India to become one of the largest healthcare players in the country.

It has expansive health cities in Bangalore, Kolkatta, Hyderabad and is setting up similar health cities at Ahmedabad, Mysore, Bhubaneshwar, Jaipur besides a few more cities.