HCG acquires majority stake in Vizag’s MGCHRI

New Delhi: HealthCare Global Enterprises Limited (HCG) has announced the acquisition of Mahatma Gandhi Cancer Hospital & Research Institute (MGCHRI) in Vizag, Andhra Pradesh, valued at INR 4,140 million. Initially securing a 51% stake, HCG plans to increase its ownership to 85% over the next 18 months.

The partnership aims to address the substantial demand for radiation therapy equipment in Andhra Pradesh and Orissa, where penetration rates are currently less than 0.6 per million. MGCHRI’s strategic location in a robust primary catchment area, with significant secondary demand from neighboring states, complements HCG’s cancer care protocols, ensuring seamless integration post-acquisition. This move is projected to boost HCG’s annual EBITDA by INR 3 per share and consolidate its leading position in the Vizag region.

Dr. B.S. Ajaikumar, Executive Chairman of HCG, expressed, “This acquisition is a significant milestone for HCG, emphasizing Vizag’s strategic importance in their growth journey. This expansion strengthens HCG’s presence in the region, enhancing their capabilities and reinforcing their commitment to providing high-quality treatment and support for cancer patients.” 

He noted, “The combined market leadership of HCG and MGCHRI would enable better utilization of doctor bandwidth and medical technology consolidation. Additionally, HCG aims to augment tech capabilities to further improve the quality of cancer care in the region. He expressed enthusiasm for continuing their mission to expand cancer care services and integrate innovative solutions to ensure exceptional, patient-tailored care”. 

Raj Gore, CEO of HCG, stated, “This partnership enhances our ability to provide cutting-edge care in Vizag’s competitive healthcare landscape. With its state-of- the-art facility, advanced technology and comprehensive medical program, MGCHRI aligns perfectly with our commitment to delivering high-quality healthcare services. Leveraging our existing presence and deep understanding of the local market, we are poised to maximize synergies across our facilities. This strategic integration will not only strengthen operational efficiencies but also enable us to offer comprehensive, patient-centered care solutions.” 

Dr. Murali Krishna Vonna, Managing Director and Chief Surgical Oncologist at MGCHRI, shared, “This union represents our shared vision to provide the highest quality cancer treatment and care to our patients in Vizag, a city that ranks among the top 10 cities by GDP. By combining our strengths, we are poised to enhance our medical expertise, expand our services, and continue our commitment to patient-centric care. I am excited about the opportunities this partnership brings and jointly remain dedicated to our mission of offering hope and healing to those affected by cancer.”

MGCHRI boasts 196 operational beds and advanced medical infrastructure, including two LINAC machines, a PET CT scanner, robotics surgery system, and a dedicated bone marrow transplant unit. Its clinical team comprises 31 doctors specializing in surgical, radiation, and medical oncology.

Financially, MGCHRI has shown robust growth, with revenue climbing from INR 1,100 million in FY23 to a projected INR 1,202 million in FY24.

HCG plans to expand multi-modality programs and enhance customer engagement strategies, leveraging operational synergies to bolster EBITDA margins and EPS growth through digital marketing initiatives.