Will not take on debt for our expansion plans: Rainbow MD Kancharla

Hyderabad-based pediatric hospital chain, Rainbow Children's Medicare, is on track to fulfil commitments made to shareholders during the company’s initial public offering in May 2022, chairman and managing director Ramesh Kancharla said. Kancharla sat down with DH’s Shakshi Jain to discuss the latest on the expansion plans, his ‘Connect South’ vision and more.

Edited excerpts.

Elaborate on the progress on your post IPO plans to add around 1,000 beds by 2027. 

During our IPO, we promised to expand our capacity by 1,000 beds by 2027. As of January 2024, we have successfully launched 305 beds across various locations. In the forthcoming two months, leading up to March 2024, we are poised to introduce an additional 130 beds, including 80 in Chennai and 50 in Hyderabad, bringing our total to 435 beds commissioned by that date.

Our strategy to augment our capacity by roughly 160 beds in Rajahmundry and Bengaluru in the following year is proceeding according to plan, with no anticipated delays.

The projects currently underway in Gurugram and Coimbatore are advancing satisfactorily and are expected to be operational within the projected timelines, aligning with our 2027 objectives.

How do you plan to fund these expansion plans? 

The company's financial health is robust, evidenced by a net cash position of approximately Rs 495 crore as of December 31, 2023. This will underpin our capital expenditure plans as previously outlined. Given our present cash flow and the expected internal accruals in the coming years, we are confident in our ability to fund all planned capital expenditures through internal accruals, negating the need for debt financing.

Explain your ‘Connect South’ vision, including the steps taken towards it so far?

To enhance emergency care for women and children and facilitate easier access to healthcare, Rainbow has implemented the hub and spoke model, supported by a comprehensive transportation network, including ambulances.

This strategic approach is designed to integrate major cities in South India, such as Rajahmundry, Nellore, Coimbatore, Madurai and Mysore, by establishing regional spoke hospitals. These facilities are then interconnected with our central hub hospitals located in Hyderabad, Bangalore and Chennai.

To date, significant investments have been made in developing large hub hospitals, with plans underway to expand by establishing sizable regional spokes. Our objective is to ensure the presence of a Rainbow hospital within every 200-250 km range throughout the South, creating a widespread and accessible healthcare network.

Outline the key challenges tied to pediatric care in India presently?

We need more speciality doctors to drive awareness. For example, children’s renal problems are better dealt with by a nephrologist for children, liver problems are better dealt with by a children’s liver doctor. 

Secondly, awareness of people going to the right hospital without losing time is the requirement. A lot of the time, they go to the nearest hospital. If the nearest hospital does not have the capability, you lose time.

The third is insurance. Whatever the class, people need to take insurance. At the corporate level, companies are providing insurance but at the district level people still have to look for insurance.

What would be a quick advice to young parents?

Routine examinations are essential for the assessment of your child's growth and developmental milestones. Adherence to the prescribed immunisation schedule is critical to protect your child from vaccine-preventable diseases. Should you have any concerns or inquiries regarding your child's health, developmental progress, or behavior, seeking advice from healthcare experts is advisable. Maintaining consistent communication with your pediatrician is vital for monitoring and promoting your child's health.