Aster DM Healthcare To Invest Rs 1,000 Crore For Five New Hospitals Outside Kerala
The new Aster DM hospitals will have a combined capacity of 2,000 beds. (Photographer: Dhiraj Singh/Bloomberg)

Aster DM Healthcare To Invest Rs 1,000 Crore For Five New Hospitals Outside Kerala

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Kochi-based Aster DM Healthcare Ltd., one of the few listed hospital companies in the country, is planning to invest Rs 1,000 crore to start five new hospitals outside Kerala.

The capex will be spread over 2-3 years. The new hospitals will have a combined capacity of 2,000 beds.

Aster DM Healthcare, which began in Dubai as a drug distributor in 1987, will add one hospital each in Hyderabad, Bengaluru and Chennai and two more in Andhra Pradesh.

"These hospitals will be on an asset-light model, wherein we will be operating and managing the facility,” said Azad Moopen, founder and chairman, Aster DM Healthcare. Chennai will have the first of these new hospitals at an investment of Rs 550 crore.”

The 500-beds Chennai facility will be operational over the next 30 months, Moopen said, adding that the Rs 1,000-crore capex plan does not include a 500-bed hospital coming up in Thiruvananthapuram.

On expansion into other markets, Aster India Chief Exexutive Officer Harish Pillai said the company is keen on entering Mumbai as it has major plans to tap into the growing health tourism in India.

But lack of ready infrastructure and extremely high rentals are roadblocks for the hospital firm. "We are more sure of entering Kolkata and Pune now," said Pillai.

The Aster DM Group, which runs 25 hospitals, 115 clinics and over 231 pharmacies in nine countries, is also planning to launch a large clinical lab chain in Bengaluru as a new vertical, said Moopen. He has already hired the top management and the firm will start operations soon.

The proposed lab will compete with SRL Diagnostics, Dr Lal Pathlabs and Way2Health, among others. It will have collection centres across Bengaluru and will also service the group's hospitals and others, said Moopen.

As far as the company’s operations in its home market are concerned, Aster DM plans to add 500 beds to the Kochi hospital in the second phase of its expansion. The group’s other facilities in Kerala include hospitals in Kozhikode, Kannur and Kottakkal, and a medical college in Wayanad.

Aster DM Healthcare currently operates six hospitals in India with 4,500 beds, of which 3,000 beds are in Kerala. It has two facilities with 500 beds in Bengaluru, one each in Vijayawada and Guntur, and a 300-bed facility in Kolhapur. It also operates 1,000 beds across six hospitals in the Gulf countries, accounting for over 70 percent of its revenue.

While Moopen and his family own 38 percent of Aster DM Healthcare, the hospital firm counts private equity firms Olympus Capital and True North as significant minority investors.

On Tuesday, Aster DM Healthcare shares rose 1.74 percent to Rs 122.55 apiece on the BSE while the benchmark Sensex shed 0.20 percent to end the day at 37,328.01 points.

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