Super-speciality RG Stone Urology and laparoscopy hospital chain is in talks with investors to raise funds which would be utilised to expand its operations to tier I and tier II cities in the coming five years. The hospital chain is going to invest Rs100 crore to set up 10 more hospital in the next three years.
While discussing the growth strategy, Hanish Bansal, Executive Director RG Stone Urology and laparoscopy Hospital said, "We are aiming to have 35 hospitals in the next five years. Under the first phase, we will set up 10 hospitals in the coming three years."
RG Stone currently has 17 hospitals across the country with a total turnover of Rs110 crore last financial year. They are expecting the turnover to grow by 10 to 15 per cent in FY14 to Rs135 crore.
Commenting on the future targets, Bansal added, "We are aiming to increase our turnover to Rs500 crore in the next five years." The company is also expected to announce the launch of three hospitals in the coming months. Two of these are expected to come up in the South while one would be based in Maharashtra.
When asked about the investment towards these expansions, Bansal said, "On average, every hospital requires Rs9-10 crore. Intotal we will be investing around Rs100 crore which would be raise by private equity investors."
Currently, India Equity Partners (IEP) holds 37 to 38 per cent stake in RG Stone while the rest is with promoters. "We are looking for new investors to fund our expansion in exchange of a stake in RG Stone. Both the promoters and IEP will dilute some of their respective stakes for the fund raising," Bansal added.
All new facilities will be company-owned and a mix of department-in-hospital model and independent full unit. "Many hospitals have outsourced their Urology department to us and we have set up a department-in-hospital. It is similar as shop-in-shop basis," he added.
In department-in-hospital model, revenue is distributed on 60:40 basis between the company and the hospital hosting the department on its premises, he added. The company is also attracting patients from the Middle East, Nepal, Bangaladesh, Sri lanka and so on.
"Our Delhi and Mumbai centres have around 5-7 per cent international patients. Kolkata also gets patients from Bangladesh," he said.
When asked if the company would go for IPO to bear its future expansion, he said, "We may go. It is one of the options. We may look at that in future."