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Hyderabad-Based Rainbow Hospitals Expands Bed Capacity by 270 in Major H2 FY24 Push

Written by : Aishwarya Sarthe

November 16, 2023

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As part of this expansion initiative, a 60-bed facility has commenced operations in Central Hyderabad this month, while another 50-bed unit is scheduled to open at Hydernagar by the end of 2023.

In a significant move to bolster its healthcare services, Rainbow Children's Hospital, the leading paediatric and maternity hospital chain in the country, has unveiled plans for substantial capacity expansion in the second half of the fiscal year 2024. 

The expansion will establish four new hospitals, collectively adding 270 beds across strategic locations in Hyderabad, Bengaluru, and Chennai.

As part of this expansion initiative, a 60-bed facility has commenced operations in Central Hyderabad this month, while another 50-bed unit is scheduled to open at Hydernagar by the end of 2023. 

Looking ahead, Rainbow aims to inaugurate two additional spoke hospitals in the first quarter of 2024 – an 80-bed facility in Anna Nagar, Chennai, and another in Sarjapur, Bengaluru.

Ramesh Kancharla, chairman and managing director of Rainbow, highlighted the company's aims to augment its bed capacity, revealing that the expansion aligns with the broader goal of adding 1,000 beds within a four-year timeframe. 

This includes the development of two greenfield hospitals in Gurgaon, boasting a cumulative capacity of 400 beds, slated for completion by FY27.

Commenting on the company’s funding standings, he further added, “Funding for this expansion will be sourced from internal accruals.” 

As of September 30, Rainbow maintains a net cash position of INR 472 Cr, providing a solid foundation for ongoing capital expenditure.

Kancharla affirmed, "Given our current cash flow and the anticipated cash flow generation of INR 250 Cr per annum in the coming years, we remain confident in our ability to complete all planned capital expenditures through internal accruals without any debt financing."

Rainbow, known for its hub and spoke model, focuses on providing specialised healthcare services, including kidney and liver transplants, bone marrow procedures, complex surgeries, and cancer care. The new hospitals aim to strengthen this model, particularly in cities where Rainbow holds a dominant market share for paediatric and maternity care.

The company is also exploring avenues for acquisitions in the West and Northeast, with Kancharla revealing ongoing evaluations of potential assets in these regions.

In a previous announcement in September, Rainbow Children’s Medicare outlined plans to invest INR 900 Cr in adding over 1,000 beds in the next four years, expanding its total footprint to over 2,600 beds across nine cities by 2027.

In the same vein, Healthcare major Apollo Hospitals has planned to invest INR 3,435 Cr to add 2,300 beds to its existing capacity in the next three financial years.

With this investment, the hospital giant seeks to add beds across eight locations to their network. The new hospitals will be in Chennai, Mumbai, Delhi, and Bengaluru. They also plan to expand their presence in Tier-II cities.


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