Sterling Hospital To Invest Rs. 120 Cr in Surat & Rajkot

Sterling hospital is going to invest around Rs. 120 crore in setting up hospitals at Rajkot and Surat. It is also planning to expands its existing hospital in Ahmedabad, and upgrade a hospital it recently acquired in Vadodara.

The moves follow UK based private equity firm Actis taking a 42% stake for an estimated Rs 72 crore in the hospitals group which is owned by the promoters of Paras Pharmaceuticals. Sources said Sterling will invest about Rs 70 crore in setting up a 200 bed super speciality hospital in Surat and another 150 bed one will be put up in Rajkot at an estimated cost of about Rs 50 crore.

"Even as these Greenfield projects are taken up, Sterling will continue to scout for acquisitions in Gujarat as well as Rajasthan," says S Venkatraman, managing director of Sterling AddLife India Ltd.

There is a significant gap in the healthcare infrastructure available in Surat and Rajkot. Once its hospitals are established in the four big cities of Gujarat Sterling will follow a hub and spokes model by setting up smaller 50 beds hospitals in smaller town nearby.

Funding expansions, new projects and possible acquisitions will not be a problem as Sterling is a zero debt company and it has the funds raised from Actis. Promoters and Actis will pump in more funds if required for undertaking any major acquisitions. Sterling is setting up a cardiology facility at a cost of Rs 5 crore at its Vadodara hospital which it acquired for an estimated Rs. 10-11 crore a year back. By June 2007, it will expand its existing hospital to 300 beds from the current 200 capacity. "Thereafter, we plant to set up a new 200 beds super-specialilty hospital in Ahmedabad as we already have a piece of land in front of the existing hospital," says Venkatraman. Medical tourism is a big emerging opportunity and already Sterling is getting significant flow of Non-Resident Gujaratis as patients. It is also having some foreigners coming from Africa and the Gulf countries.

"To attract foreigners from the UK and USA, we will have to get the Joint Commission International (JCI) certification which will enable insurance companies in those countries to finance patients who come here. We have got an advisor who is preparing the groundwork so that Sterling's Ahmedabad hospital can apply for JCI certification," says Venkatraman. Sterling has been at the forefront of introducing the most advanced medical treatment in the state.

(Ref : Economic Times dated December 14, 2006)