Moolchand raises $18.7m from Sequoia Capital
Sequoia Capital has invested INR1 billion ($18.7 million) into New Delhi-based Moolchand Healthcare, with an aim to fund the company’s further expansion and acquisitions of hospitals across India.
The company plans to invest INR5 billion over the coming five years in future expansion. It will build at least 700 beds and six specialty hospitals in the capital, in which 400 beds will be commissioned by 2014, Shravan Talwar, chief executive of Moolchand Healthcare, told Live Mint.
He added that the company will also expand its hospital in Delhi, acquire stand-alone hospitals that have 150-300 beds across India, and set up fertility, diagnostics and renal-care centers.
"Capital efficiency is very important for us," said Abhay Pandey, managing director of Sequoia Capital. "Usually we find hospitals that are capital intensive. This is a zero-debt firm."
Pandey added that Sequoia will help Moolchand identify acquisition targets and may consider funding the purchases.
Sequoia has invested in a number of healthcare companies in India, including in Vasan Healthcare, Paras Pharmaceuticals and Glocal Healthcare Systems.
India's healthcare sector as a whole is worth $40 billion and is seeing compound annual growth of 15%. Badly in need of consolidation and infrastructure investments, India's hospital chains are an attractive target for private equity.
According to AVCJ Research, private equity firms have committed $529 million to Indian healthcare companies across 16 deals so far in 2012, surpassing last year's total of $333 million. Hospitals and healthcare centers have accounted for seven transactions, but more than 70% of the capital deployed.
In April, Advent International committed $105 million to CARE Hospital, which engages in cardiac care, neurology, nephrology and general medicine, with 1,590 beds across 11 hospitals.
In March, Government of Singapore Investment Corp. (GIC) also invested $100 million for a minority stake in Vasan Healthcare, which runs eye care hospitals across India. In January, Olympus Capital Asia committed a similar amount to DM Healthcare, which operates hospitals, medical centers and pharmacies in India and the Middle East.
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