December 10, 2023

Healthcare Global

Splash Healthcare Global All Over

Healthcare Global to acquire full share capital of Nagpur cancer hospital HCG NCHRI

B.S. Ajaikumar, Chairman and CEO of HealthCare Global Enterprises, in a chat with with CNBC-TV18, shed light on the company’s business outlook and its plans to consolidate the Nagpur cancer hospital into a state-of-the-art centre of excellence.

Healthcare Global Enterprises is making significant strides in its expansion efforts in Nagpur. The company has recently announced its plans to consolidate its operations in the city, demonstrating its commitment to providing quality healthcare services to the residents of Nagpur and its surrounding areas.

As part of this consolidation, Healthcare Global Enterprises is executing a share purchase agreement to acquire the entire equity share capital of a prominent cancer hospital in Nagpur, HCG NCHRI. This acquisition marks a significant milestone for the company, as it strives to enhance its presence and make a positive impact in the field of cancer care.

B.S. Ajaikumar, Chairman and CEO of HealthCare Global Enterprises, discussed this development and shed light on the company’s business outlook in an interview with CNBC-TV18.

Below are excerpts from the interview:

Q: Can you give us some more details on this? You had indicated this before but now you are executing it. Can you tell us what the timeline of the completion of this deal would be, what are the reasons for this acquisition?

A: Nagpur is one of the important centres for us. We started the cancer centre partnering with Dr Mehta, who is a surgical oncologist, and now what we have done is completed the acquisition of the cancer centre where we were partners. We were minority in NCHRI before. Now we have become 100 percent owner. The only reason to do that is to expand our presence in Nagpur. This will help us to financially consolidate our operations. We hope to finish this in the coming quarter. We are just waiting for some approvals, and most of them are in place, so we should complete it in the next two months.

Q: What’s the bed capacity and occupancy in the hospital? I think the revenues were approximately Rs 50-51 crore. How do you see the scaling up in the time to come?

A: There are about 120 beds. We have built a very big centre in Nagpur. It is a state-of-the-art centre. And we think with this, the expansion possibilities are there. We are bringing new technology, (including) state-of-the-art radiation equipment. Robotic surgery is also in the works. So, with the help of Dr Ajay Mehta, we want to make this one of the centres of excellence.

Nagpur is at the centre of the country. So, it is very premier for us. (We will) expand locally and create a hub and spoke model around Nagpur. That is how we expect to grow in this region.

Q: Any other inorganic plans that you have and any kind of war chest, any amount that you have laid out for these acquisitions over the next 12-18 months?

A: We have declared in the last meeting that we are in the process of some acquisitions, M&A activity, but today I will not go into details. We are also in the silent period, but we hope to make some announcement in the next few months around some significant M&A activity.

Q: Can you tell us a bit about this centre itself? What is it doing in terms of occupancy levels? How much do you think the growth rate could be for the business over the next one year?

A: Just to take some parameters — our footfall has increased over 20-25 percent. Our occupancy rate is around 60 percent and we expect this to increase to about 70-80 percent as we grow.

The most important thing is our outpatient has increased significantly. In fact, our linear accelerator is running to full capacity and we are also looking at installing the second linear accelerator in the near future.

With robotic surgery coming in and with the hub and spoke model, we have daycare centres, which we will plan in the future, (where) we expect a significant growth.

Nagpur has done very well if you look at the history in the last few years. And now with this consolidation, as we have announced, we will be adding additional EBITDA of nearly Rs 7.5 crore to our system — which will be significant financial upside.

Q: Rs 7.5 crore by when?

A: Once the consolidation is announced, once we get the necessary approval, it will add to that… we are hoping in this quarter.

For more details, watch the accompanying video