Mumbai-based diagnostic laboratory chain Metropolis Healthcare Ltd is planning to set up 10 laboratories in Gujarat over the next two years through a mix of acquisitions and greenfield projects. The company has laid out an expansion plan of Rs 15-20 crore for Gujarat.
Recently, Metropolis acquired a brownfield project in Mehsana in north Gujarat for an undisclosed amount. “The strategy behind acquiring Mehsana laboratory was to establish a hub in that region to cater to the surrounding areas of Northern parts of the state. We are also looking to open 10 more laboratories in Gujarat over the next two years, besides the existing five labs in the state,” said Ameera Shah, MD & CEO, Metropolis Healthcare. The company has joined hands with 18 private hospitals across country to provide laboratory services.
However, it is also looking to partner with government-run hospitals in Gujarat as well as in Mumbai to provide lab facility on a public-private partnership model. “We are looking forward to tie-up with one of the government hospitals in Gujarat if found an opportunity there,” she said.
Currently, Metropolis has 62 labs operational in India, and 13 in overseas markets. In the current financial year, the company aims to open about 18 laboratories in India with a total investment outlay of about Rs 60 crore. “We plan to open at least 10 greenfield labs and eight acquisitions during this fiscal and reach a turnover of Rs 330 crore this year. Over the next 3-4 years we should be able to reach a turnover of Rs 600 – 700 crore,” added Shah.
Funding for the expansions would be met through a mix of internal accruals and funding from private equity major, Warburg Pincus. Warburg, a leading global private equity firm, had invested about US $ 85 million in Metropolis in June 2010.
Diagnostic laboratory industry, which is estimated to be about Rs 10,000 crore in India is largely fragmented and unorganised. However, the organised players including Metropolis constitute about 15 per cent of the total market size. “According to estimates, there are about 100,000 pathology laboratories in India of which only hardly 200 should be accredited. But ten years from now we see this industry consolidating and health insurance industry would drive the growth,” Shah informed.