Multispecialty hospital chain Narayana Hrudayalaya Ltd on Tuesday said it will sell its Hyderabad hospital to its partner Chandramma Educational Society.
“As part of our regular strategic business reviews, we constantly monitor and assess risks and costs associated with all our business units,” said Ashutosh Raghuvanshi, vice-chairman, managing director and group chief executive of the Bengaluru-based Narayana Hrudayalaya, in a statement to exchanges. “Conforming to the same and in order to maximize gains for all the stakeholders, we deemed it appropriate to discontinue operations at our Hyderabad unit.”
The 195-bed hospital was taken on a 20-year lease with Chandramma Educational Society in July 2010. The hospital generated Rs.32.2 crore revenue in the nine months ended December 2015. These revenues constitute 2.7% of Narayana Hrudayalaya’s total revenue of Rs.1,181.50 crore.
Narayana Hrudayalaya shares rose 3.06% to Rs.296.70 on the BSE on Tuesday while Sensex fell 2.03% to 24,883.59 points.
Founded by renowned cardiac surgeon Devi Prasad Shetty in 2000, Narayana Hrudayalaya has a network of 22 hospitals and seven heart centres across the country with a bed capacity of 5,200. It plans to reach a capacity of 6,300 operational beds.
Raghuvanshi indicated that the company, which went public in January, is open to exiting hospitals that don’t meet its expectations. “We would continue to be flexible and pragmatic in the future as well to sustain the long term interests of the business,” added Raghuvanshi.
In February, Narayana Hrudayalaya bought 26% stake in a subsidiary Narayana Hrudayalaya Surgical Hospital Pvt. Ltd which maintains hospitals, clinics, and nursing homes for Rs.302.56 crore.
Chandramma Educational Society, founded by Malla Reddy, an educationist-turned-politician, also runs a private medical college, and pharmaceutical and engineering colleges, located on the outskirts of Hyderabad.