Healthcare Global Enterprises Limited (HCG) has received a fund infusion of Rs. 31.20 crore from Milestone Religare Investment Advisors Pvt. Ltd, a joint venture between Milestone Group & Religare Enterprises.

This will allow the oncology major to expand its operations in Bangalore in terms of bed strength by May 2010, set up a super speciality surgical centre and install its second PET and MR equipment. The Group will also install two CyberKnife at Mumbai and New Delhi. It has also firmed up its intentions to make its maiden entry abroad to Bangladesh.

The investment from Milestone Religare is the fourth assistance from the private equity space. So far HCG has received an assistance of Rs. 150 crore from IDFC (Rs 50 crore), Premji Invest (Rs 80 crore) and Evolvence India Life Sciences Fund (Rs 22 million). The investment from Milestone Religare will take the total amount to Rs 181 crore. Current share holding pattern for HCG is 60 percent with the private equity and 40 percent with the panel of doctors. Dr BS Ajaikumar, chairman HCG is the single largest share holder. HCG is looking at going public by end of 2011.

This investment has been made from the India Build-Out Fund – I, which is a Rs. 6 billion private equity fund focusing on education & healthcare infrastructure. This takes Milestone Religare’s investment in the healthcare sector to around Rs 1 billion. Equirus Capital acted as the exclusive advisor to HCG on this transaction.

“Going by the increasing incidence of cancer not only in the metros but Tier II cities, out of our 20 network hospitals which spans through 11 such locations, we are keen to offer diagnosis and therapy at the early stage. We also envisage to strengthen Triesta Lifesciences the clinical research, diagnostic and R&D arm of the Group. Through a Central Lab we will offer advanced diangostc across the country and also include breast cancer genomic grading system,” Dr Ajaikumar said at a press conclave.

The Group has also acquired six acres of land in Bangalore at Devanahalli for a Greenfield project. Its current bed strength in India is 1250. HCG’s international foray is through a partnership model. In Bangladesh it has already identified the partner which is a 400 bed hospital where 50 beds are dedicated for oncology. This centre would entail an investment of around Rs. 12 crore. In Sri Lanka talks have begun for partnerships. It has also identified Africa to open up cancer clinics, he added.

“The Indian healthcare sector is on a growth path. Along with an increase in chronic diseases, there is an increasing incidence of lifestyle related diseases. Cancer is one of the largest non-communicable diseases in India and with around three million patients,” said Rajesh Singhal, managing partner of Milestone Religare,

HCG is positioned well to fill the large gap that exists between the demand for quality cancer care and the current infrastructure. “We intend to work closely with the HCG management and grow the company further, into a comprehensive cancer care provider and research centre,” he added.

According to Dr Amit Varma, Board and Investment Committee member of Milestone Religare, for the Indian healthcare industry existing infrastructure is inadequate. Cancer care is largely restricted to 24 government funded regional centres and a few private players. More than 80 per cent of the cases are detected at advanced stages due to inadequate facilities.

Ravi Mani, who led the transaction from Equirus Capital, said that Indian healthcare sector has been growing significantly over the last few years and has been attracting private equity capital. HCG with its state-of-the-art unique oncology-focused business model has been growing at a CAGR of over 50 per cent in the last few years.