)
Bangalore-based NationWide Primary Healthcare Services, a chain of primary healthcare clinics, has decided to tweak its business model.
The healthcare chain, which was hitherto operating mostly through corporate tie-ups, will now focus on full-fledged retail clinics to cater to patients of all categories. NationWide's corporate services include on-site consultations and health education initiatives, which are used by several blue-chip companies.
The retail model is capital-intensive. This means NationWide, founded in March 2010, will need more funds. While the company, which had raised Rs 25 crore from Norwest Venture Partners (NVP) in September 2012, confirms it is gearing up for another round of fund-raising of about Rs 100 crore, it refuses to say from whom is it raising the funds.
NationWide will use the funds to expand from the current 15-odd clinics to 20 by the end of March 2014. Also on the cards are setting up 100 more clinics in Bangalore alone over the next 18 months, reveals Santanu Chattopadhyay, founder and managing director of NationWide Primary Healthcare Services.
While such rapid expansion may be riskier in the short-term, it could give better returns in the long-run.
Of late, investors have been gung-ho about the healthcare sector. "Investments into the healthcare sector will continue to grow based on the robust performance of both established and newer players. Exits in the form of secondary sale have also brought in a slew of new PE (private equity) investors into the sector," says Rana Mehta, leader (healthcare) at PwC India.
"Having tie-ups with corporates is a safe strategy, but gives little or no returns," says Chattopadhyay, adding, "It was initially only aimed at brand-building and brand awareness." The chain succeeded in this strategy by getting the employees of the companies with which it has tie-ups to bring in their families to its clinics, thus building a captive market.
Having built a strong base in its home turf, the company is now looking to take its clinics beyond Bangalore.
It has two outlets in Gurgaon and will soon expand its footprints in across Delhi, for which it has already started recruiting doctors. For Delhi, it has received 70 applications from doctors. NationWide has shortlisted 10 doctors, of whom four or five will be chosen, says Chattopadhyay.
Chattopadhyay says the chain has so far utilised only about half of the Rs 25 crore it had raised from Norwest Venture Partners. In September this year, the chain again raised Rs 5.5 crore in a fresh round of venture debt funding led by SVB India Finance. This was mostly to cover operational expenses including salaries to doctors. NationWide preferred the debt route as it does not involve dilution of equity, Chattopadhyay adds.
NationWide now conducts four-hour tests for doctors every Tuesday and Thursday. The scores earned are valid for two years. If a clinic is opened in the locality where the doctor lives, then they will be given the appointment.
While the chain has refused to divulge its revenues, a back-of-the-envelop calculation from the figures given by Chattopadhyay shows that it clocks Rs 14 crore in quarterly revenues. On an average, 15,000-20,000 patients visit an outlet in a quarter, with each patient spending about Rs 600. For every retail clinic, the chain wants to open three corporate outlets, says Chattopadhyay.
