The central government’s strategic sell-off of its healthcare company HLL Lifecare Ltd (HLL) will not turn out to be a real estate play as the government has stripped off the biggest leasehold real estate asset HLL had – 430.1 acres of land in Chennai on an 86-year long lease at Rs 1 per year – from the freehold and leasehold real estate assets of HLL that will change hands post disinvestment.
HLL had a turnover of ₹5,081 crore in 2020-21 and is involved in manufacturing and marketing of a range of contraceptives, women’s healthcare products, hospital supplies as well as other pharmaceutical products. The company also provides healthcare and diagnostic services, consultancy and contract services for healthcare infrastructure projects and consultancy services for procurement of medical equipment and devices in the healthcare sector. HLL currently operates 220 pathology labs, 47 imaging centres and 6 labs across the country under the Hindlabs brand name. It operates a total of 253 pharmacies, or life-care centres, offering affordable drugs and implants across the country, mainly out of locations within government-owned healthcare institutions.
The preliminary information memorandum (PIM) issued by finance ministry’s department of investment and public asset management (DIPAM) on November 14 indicates that apart from this land parcel that came into the possession of HLL post a lease deed signed with the Central Leprosy Teaching and Research Institute (CLTRI) on February 26, 2009, every other land asset currently held by HLL will be part of the sale. This includes six freehold plots that house HLL factories and offices in Thiruvananthapuram (Kerala), Belgaum (Karnataka), Chennai (Tamil Nadu) and Lucknow (Uttar Pradesh), and 10 leasehold properties across Kerala, Maharashtra, Goa, Haryana, Uttar Pradesh, Uttarakhand and Madhya Pradesh.
The PIM states that the 430.10 acres of land situated at Chengalpattu in Tamil Nadu was handed over to HLL for setting up an integrated vaccine complex (IVC) for manufacturing new generation vaccines required for universal immunisation program (UIP) of the government of India and a establishing a ‘Medipark’, a medical devices manufacturing park.
Of the land, 100 acres were allotted on sublease by HLL in February 2014 to HLL Biotech Ltd (HBL), a subsidiary company formed by HLL to implement the IVC project. Subsequently, in March 2017, the remaining 330.10 acres of land was subleased to another subsidiary HLL Medipark Ltd (HML) to set up the ‘Medipark’ project. Both HBL and HML have now been demerged from HLL to ensure that this particular land parcel will not form part of HLL’s strategic disinvestment.