PROJECT

Projects

Environmental & Social Review Summary

Project Number

37903

Company Name

HEALTHCARE GLOBAL ENTERPRISES LIMITED

Date ESRS Disclosed

Mar 16, 2016

Country

India

Region

South Asia

Last Updated Date

Apr 16, 2025

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Feb 8, 2016
Signed : Mar 8, 2016
Invested : Mar 10, 2016

Sector

Hospitals and Clinics

Industry

Health, Education and Life Sciences

Department

Regional Industry - MAS Asia & Pac

Project Description

The proposed IFC equity investment in Healthcare Global Enterprises Ltd (“HCG” or the “Company”) is a part of the equity issuance of the HCG initial public offering (“IPO”). The HCG network of cancer centers is the largest provider of cancer care in India as measured by the number of cancer treatment centers licensed by the Atomic Energy Regulatory Board (AERB), treating approximately 37,500 new patients per year (as of March 31, 2015) in India with 14 existing comprehensive cancer centers (CCCs), 3 diagnostics centers and 1 day care chemotherapy center.

The company’s cancer care network currently has 1,100 beds in operation (including 181 self-care beds) and spans 13 cities and towns across eight states in India.

The company broadly establishes its CCC’s under two constructs:

Free standing/stand-alone CCCs : [ten out of the 14 of the existing HCG CCCs and 10 out of the 12 of the proposed CCCs]; and
CCCs within the premises of another tertiary care hospital, wherein HCG establishes and has exclusive rights to operate the cancer center in said hospital [four out of the 14 and two out of the 12].  

Of the Free Standing CCC’s, except for its Bangalore center of excellence (CoE) (for which the land is part owned and part leased), the CCCs at Double Road, Vijayawada and Ongole, Ahmedabad and the upcoming CCC at Kanpur, the company does not typically own the land and building for its CCCs. Typically the company enters into long term lease agreements with third party owners. In all such cases the lease is usually a fixed monthly rental and in a few cases the lease rental includes a variable component. For the CCCs housed within another hospital, HCG typically pays a share of revenue earned by the center to the partner hospital.

In addition to the cancer care network, the company has two multispecialty hospitals in Ahmedabad and Bhavnagar (110 and 92 beds (of which 35 are operational currently), respectively). In 2013, HCG acquired a 50.1% stake in BACC healthcare, allowing it to operate four fertility centers in Bengaluru under the brand Milann. Also, the company has entered into a definitive agreement with a developmental finance institution to invest in HCG Africa, which has been formed to establish a network of CCCs in Africa.
The company is planning an IPO, proceeds of which would help finance; (a) capital expenditures for 12 new CCCs in India which are in various stages of development; (b) purchasing of medical equipment at the existing 14 CCCs; (c) a major upgrade to the information technology (IT) systems, and (d) repayment of debt (“the Project”).

IFC would potentially be an “anchor” investor in the IPO with a straight equity investment of US$15 million equivalent [Indian Rupees (INR) 1,000 million].

Overview of IFC's Scope of Review

IFC’s review of the proposed investment consisted of appraising technical, environmental, health and safety (EHS) and social information submitted by HCG including on Human Resource (HR) (HR) policies, EHS policy, quality management system documentation including various policies, manuals and procedures, and information related to life and fire safety. In addition, discussions with held with the company’s corporate management from quality, legal, projects and HR departments as well as facility level quality and safety staff.

The appraisal also included site visits in December 2015 and January 2016 to HCG’s:

CoE in Bengaluru (five towers, two of them owned by HCG and remaining on lease);
CCC in New Delhi (part of a multi-specialty hospital);
Multi-specialty hospital (independent building owned by HCG); and
CCC in Ahmedabad (independent building leased by HCG);

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan