Hyderabad: Rainbow Children’s Medicare Pvt. Ltd, India’s largest specialised child and maternity care hospital chain, on Thursday said it plans to raise about 60-70 crore for its proposed 150-bed hospitals in Pune and Jaipur.

“We are looking at top up private equity of 60-70 crore, which either can be raised from CDC or we can opt for somebody else," chairman and managing director Ramesh Kancharla said.

The preliminary work such as market study have begun for Pune and Jaipur hospitals, Kancharla said.

Rainbow raised 100 crore in August 2013 from CDC, the UK-based development finance institution and Dubai-based private equity firm Abraaj group to set up three multispecialty paediatric and maternity hospitals with a total capacity of around 400 beds in Bangalore, Chennai and Visakhapatnam at an investment of 200 crore.

The upcoming 100-bed hospital at Jayanagar in Bengaluru is expected to begin operations in 6 months, while 160-bed hospitals each at Saidapet, Chennai and Visakhapatnam are expected to be ready in 20-24 months, Kancharla said.

In addition to 100 crore equity raised from CDC, Rainbow said it plans to avail 75 crore through bank loans and the remaining through internal accruals from operations of Hyderabad and Vijayawada hospitals.

“We are AA rated company, we get debt at interest rate of around 11%, which we want to leverage," Kancharla said.

Kancharla said it takes 45 lakh for each bed for new projects, which was 20% more costlier than its previous projects on account of dollar escalation.

The expansion will take the total bed capacity of Rainbow from existing 700 to around 1200 beds in next two years.

Rainbow currently runs four hospitals in Hyderabad and one each in Bengaluru and Vijayawada.

Established in 1999, Rainbow Hospitals is promoted by two paediatricians Ramesh Kancharla and Dinesh Kumar Chirla—who hold around 79% stake in the company.

“There is an increasing need felt that children are best catered in hospitals designed to their needs rather being clubbed into multispecialty hospital," said Rana Mehta, leader, healthcare at PwC India, a consultancy.

“The advantage of single specialty hospital is that they are more focussed and have clearer value proposition and many of them tend to be asset light with more replicable and scalable model, because the focus on one specialty—they achieve operational efficiencies faster," Mehta said. “Typically in mother and child space we are seeing lot of action."

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