Chennai: The Asian private equity arm of the HSBC group, HSBC Private Equity (Asia) Ltd, and ePlanet Ventures, a venture capital firm, have picked up a stake in Trivitron Medical Systems, a medical technology company.
They have jointly invested Rs45 crore in return for an undisclosed minority stake in Trivitron.
Trivitron said the investment will help establish a Rs250 crore medical technology park to manufacture medical equipment. The company aims to manufacture 50% of the medical equipment it sells by 2010 in India.
Trivitron will invest Rs105 crore more through a combination of internal accruals and debt. The other joint venture partners are expected to invest the remaining Rs100 crore.
Currently, some 95% of Trivitron’s revenues come from selling imported medical equipment in the country.
“We chose HSBC and ePlanet Ventures because of the value they bring to the table beyond just the money,” said G.S.K. Velu, managing director of the Trivitron group of companies. “Their investment will help us become more visible in the international markets.”
The medical equipment industry in India is estimated to be around Rs12,000 crore as of 2006 and is expected to grow every year at 20% to touch Rs40,000 crore by 2012, according to Velu. About 90-95% of medical equipment sold in the Indian market is imported.
Velu said domestic manufacturing of medical equipment would also help cut costs by 30-50%. The park will be used to manufacture medical equipment in various categories including diagnostics, surgical technologies and consumables and disposables.
Trivitron has signed a Rs50 crore joint venture agreement with Japan-based Aloka Co. Ltd, a diagnostic equipment maker, to manufacture portable black and white ultrasound scanners and whole body colour dopplers. It is in talks with four other companies as well.