Radiant also owns Mumbai’s Nanavati as well as Delhi’s B L Kapur Hospital, which it had acquired earlier.
The merged entity will be investing Rs 2,000 crore in order to build 1,900 beds in its hospital assets in the next three to three and a half years, which include adding in 900 rooms in Max Smart Saket in Delhi and another 650 beds in Nanavati in Mumbai.
The money will be raised partly through debt and internal accruals.
The net debt of the proposed merged entity is Rs 1,287 crore (till September 2018) and an additional Rs 870 crore will be raised. As part of the exercise to improve margins in Max, Radiant is also looking at truncating or closing down of some of its centres (mostly day care centres) in the National Capital Region.
Currently, Max has 16 centres, which include nine large hospitals and day centres.
Speaking on the plan to restructure Max Abhay Soi, who is currently the chairman of the board and executive council in Max Healthcare and the co-promoter of Radiant, said: “Our aim in Max is to bring the Ebitda margins from 13 per cent to 16 per cent. We think it is a great time to look for opportunities for acquisition of hospitals at the right price and we are looking at a pipeline.
I don’t think this opportunity will be there after two years” With the acquisition of Max, Soi has already become the third largest hospital chain in the country with revenues of Rs 3,443 crore (FY18), behind only Apollo and Fortis. It also had more than 3,246 beds across the 18 hospitals, making them the fourth largest in the pecking order.
Soi says they will enter only metros with a hub strategy which means one big hospital that would be 400-500 beds. Then they will also have smaller hospitals, which are 200-300 beds, but not smaller than that.
The merged entity will also look at setting up offices in international markets which include Nigeria and Sudan and other African markets so that it can offer patients “direct to fly” services to one of their hospitals. Soi says that it is important to have offices as it increases the trust amongst for a patient and his family and also assist them with medical visas as well as payment gateways.