Healthcare Global Enterprises Ltd (HCG), a leader in oncology care has received a fund infusion of Rs 80 crore ($20 million) from PremjiInvest, a fund sponsored by Wipro chief Azim Premji. The funds will be used for major expansion into Tier I and Tier II cities to offer high-end oncology care to the growing number of cancer cases in the country besides setting up its three Centre of Excellence in Bangalore, New Delhi and Ahmedabad.
Based on the hub and spoke model, the Group will need to invest Rs 8-10 crore for each new centre. The Centre of Excellence will require Rs 40-50 crore each. The Rs 80 crore funds will be utilized over the next 18 months. The Group is also in the final stages of a discussion with an oncology major at Cuttack for an acquisition of facility.
With PremjiInvest coming forward to support HCG into expansion, its representatives Prakash Parthasarthy and Bobby Mustafa have been inducted into the Board of HCG.
The Centres of Excellence will not only offer comprehensive cancer but also state-of-the- art imaging and diagnostics to smaller towns. The backward integration in cancer management on a pan India basis will see HCG expand from the present 10 locations to 15 locations by the year end and thereafter will look at another 5 more small cities. The hub and spoke model in oncology care will allow HCG to create a network which is accessible by patients from smaller towns for high end cancer care, stated Dr Ajai Kumar, chairman and CEO, HCG.
Investment from PremjiInvest would ramp up our access to various geographies and enhance our research capabilities, he added.
According to Prakash Parthasarthy, chief investment officer, PremjiInvest, this is for the first time that funding is offered to a hospital in the private sector and that it would go ahead to fund HCG in its future initiative. The PremjiInvest fund has supported hospitals in the public sector. The objective is to scale up healthcare businesses which are backed by strong governance.
In mid July 2006, HCG raised Rs 500 million in equity from IDFC Private Equity Fund II, a fund managed by IDFC Private Equity and in June 2007, received Rs 22.5 crore( $5million) from Evolvence India Life Sciences Fund promoted by the Dubai-based Evolvence Capital.
The HCG Group requires Rs 200 crore over the next five years. While it has generated Rs 80 crore from PremjiInvest, Rs 10 crore from Evolvence and there remaining will be a debt component, stated Dr Ajai Kumar.
The cancer major is now the largest oncology care group in the country with 65 oncologists in Bangalore and a total of 110 cancer specialists at its 10 centres in SMH Curie Centre in New Delhi, Nasik Ahmedabad, Ranchi, four units in Bangalore, Bharat Hospital and Cancer Institute at Mysore and the Malnad Hospital and Institute of Oncology in Shimoga. Facilities at Vijayawada and Hubli will be operational before the year-end.