New Enterprise buys 20% stake in Nova Medical

New Enterprise Associates (NEA), the US-based venture capital firm, has picked up a stake in the Bangalore-based Nova Medical Centers (NMC).

NEA along with New York-based private equity firm GTI Group LLC has invested $16 million in the firm that has pioneered specialised day-care surgery centre concept in the country.

Both NEA and NMC did not divulge investment details.

NMC sources, however, said that though a significant proportion of the $16 million has come from NEA, GTI Group will remain a majority stakeholder.

“NEA’s investment gives it a little over 20% in the business. GTI, which seed-funded the company, holds under 50% and balance is with other stakeholders including the co-promoter,” said the company source.

The funds will be used to set up a chain of specialised day-care surgery centre across key metros in the country. The capital expenditure of Rs 250 crore would be done through a mix of equity (Rs 100 crore) and debt.

Girish Rao, managing director and CEO of NMC, told DNA Money that the company will have about 25 such facilities in the key metros as part of the Phase I expansion. “Our second surgical facility in Bangalore (Sadashivnagar) will start in June.

By September we should be opening another four facilities - 2 each in Mumbai and Delhi. In all, Phase I will see 25 surgical facilities in 18-24 months from now,” said Rao.

With 25 centres, NMC is targeting a turnover of Rs 700-750 crore.

Rao said more players may enter the day-care surgery segment.

The overall healthcare market in India is pegged at Rs 200,000 crore of which over 60%, or Rs 120,000 crore, comprises surgery.

Around 60-70% of the surgery market is in the day-care category.

In Mumbai the Nova centres are expected to come up in Tardeo and Chembur while the Delhi centres will be located in east of Kailash and either Greater Kailash or Janakpuri.

Among other cities identified for expansion include Chennai, Hyderabad, Kolkata, Pune Amritsar, Jaipur and Coimbatore.

Spread across 12,000 square feet, Nova’s first surgery centre was launched a year ago. The facility has 4 ultra-modern operation theatres, capable of handling a minimum of 20 surgeries daily.

The facility is well-equipped to handle close to 700 surgeries that can be done without the need for hospitalisation.