The expansion will be done through selective buyouts of standalone hospitals and signing operations and management (O&M) contracts pan-India, said Dr. Raajiv Singhal, founding member and managing director of Marengo told ET in a recent interview.
“We are fully funded to expand upto 2200-2500 beds as part of our first phase,” Singhal said.
Singhal declined to disclose the quantum of investments committed by the three investors, but said the company is constantly evaluating hospital assets across India.
Marengo managed to ramp up its network beds capacity to 1300 in less than six months through a string of acquisitions and O&M deals.
“We will be a pan-India chain. We have started with North and West India, and will be looking at South and East,” Singhal added.
Singhal said Marengo plans to be a 5000 bed hospital chain in the next three years. The company follows a cluster model for expansion.
“We pick up a flagship (hospital) and then build a cluster (around it). Every cluster should have around 1000 – 1200 beds which can complement each other clinically and generate operational efficiencies,” Singhal said.
The healthcare platform announced the launch in October 2021 with Rs.450 crore investment in 330 beds CIMS Hospital, Ahmedabad, followed by adding 550 beds QRG
Specialty Hospital based in Faridabad in November 2021.
The company has recently entered into agreement to operate and manage KK Patel Super Specialty Hospital in Bhuj, Gujarat built Levua Patel Trust.
Singhal, a veteran hospital executive who was roped in to build Marengo from scratch.
Singhal says despite being a late entrant, there is enough potential for a platform like Marengo to grow, as most of the leading hospital chains are concentrated around 10 large cities, while there is a large unmet need in tier-2 and tier-3 cities .
Research estimates the Rs 5 lakh crore Indian healthcare delivery industry is expected to post a healthy 15-17% CAGR between fiscal 2021 and 2025 to reach 7.67 lakh crore. Much of that growth will be driven by tier II and III locations.