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Healthcare Global rallies on acquiring oncology hospital lab from Strand Lifesciences

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Healthcare Global Enterprises rose 2.14% to Rs 241.55 after the company said it has acquired oncology labs and divested stake in Strand Lifesciences to Reliance Industries group company.

HealthCare Global Enterprises (HCG) announced the acquisition of oncology hospital labs and clinical trials business from Strand Lifesciences as well as simultaneous divestment of its approximately 38.5% stake (on paid-up capital basis and 34.5% on fully diluted basis) in Strand to Reliance Industries group company.

HCG received consideration of about Rs 157 crore for sale of its ownership in Strand and acquired labs and clinical research business through a business transfer agreement (BTA) from Strand for a consideration of about Rs 81 crore with a set-off of about Rs 7 crore towards receivables. The transactions resulted in net cash inflow of Rs 83 crore for HCG in addition to the take-over of the labs and clinical research business.

HCG is one of the largest oncology-focused private hospital groups in India with a significant network of oncology centers located across leading cities and treating thousands of 'new cancer patients' every year.

Strand Lifesciences is a precision diagnostics company with strong track record in bioinformatics and genomic testing in India. Strand will no longer continue to be an associate company of HCG post completion of this transaction.

In January 2018, HCG had executed a business combination of its hospital labs and clinical trials business, which operated under Triesta brand, with Strand's clinical diagnostics vertical to jointly focus on specialized oncology space, which also led to HCG becoming the single largest shareholder in Strand. Subsequently, the newly combined Strand entity had raised capital from PE investors and also acquired Quest Labs India business, which was later divested during onset of the Covid-19 pandemic.

HCG has acquired hospital labs in 12+ cities, which includes state-of-the art lab at flagship COE (Center of Excellence) in Bengaluru, labs in Mumbai, Kolkata, Jaipur, Ahmedabad etc. and a digital pathology network.

On a consolidated basis, HCG reported a net loss of Rs 12.52 crore in Q1 FY22 as compared to a net loss of Rs 45.61 crore in Q1 FY21. Net sales surged 67.6% to Rs 322.42 crore in Q1 FY22 over Q1 FY21.

HCG is a leading speciality healthcare provider with a focus on cancer care and reproductive medicine. Under the HCG brand, the company operates 20 comprehensive cancer centers across India and Africa, and has brought advanced cancer care to the doorstep of millions of people.

Meanwhile, shares of Reliance Industries (RIL) gained 1.42% to Rs 2,422.20 on BSE. RIL is the largest private sector corporation in India. Its activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and digital services.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Mon, September 06 2021. 15:12 IST