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After making its debut in Malaysia, Narayana Health chairman Devi Shetty is looking to expand into the African market. Shetty and A Raghuvanshi, vice chairman, MD & group CEO of the company, tell Digbijay Mishra in an interview that talks are in different stages with several people for its foray into Africa. Domestically, too, it may go for partnerships to plug infrastructure gap in healthcare while plans are intact to provide over 30% cheaper services in its super specialty hospitals in India’s smaller towns. Excerpts:
What is the road ahead and what plan have you chalked out?
Shetty: Our target is to build super specialty hospitals in tier 2 and tier 3 cities. There are 100 towns in India with population of half a million to one million where there is no super specialty hospital. We are still running city-centric model. If somebody has a heart attack in west Bengal he has to come to Calcutta. So the intention is to be near every district and we are starting with 100 towns.
Does that mean metro market is now getting absorbed?
Shetty: No, there is huge demand. In metros as well, hospitals are in certain locations and from other parts of city it takes two to three hours so distance is a major factor.
Raghuvanshi: We have recently started a project in UP and we are looking at consolidating our presence in the market. We are looking at three main clusters. That’s the plan. We are also ready to commission a hospital in Guwahati next month which is starting with 200 beds but eventually it will be 350. We are also ready to build construction for a project in Odisha this year. Plan is to have, on an average, five to six hospitals this year.
You recently ventured into Malaysia. What are the new geographies you are looking at?
Raghuvanshi: We are actively looking at projects in Africa. There is a huge opportunity there because it is grossly underserved market. Both in north and west Africa, we are in talks with several people who have shown interest. We will go via JVs. There is a Indian diaspora there so that opportunity is there.
Why so keen on Africa?
Raghuvanshi : In Nigeria, there are no more than 2 centres in the heart segment...so opportunity is huge. Also, many Africans come to India for treatment. We want to provide expertise to people who want to invest in infra there…so looking at projects which are mutually beneficial.
How is the pricing going to be in your low cost hospitals in Indian towns?
Raghuvanshi: Our Mysore centre is designed and built in a manner to keep the cost low. Cost typically compared to other hospitals in Mysore vicinity is 10-15% lower but when you compare it with Bangalore its almost 35% cheaper.
How many such low cost hospitals are on the cards?
Raghuvanshi: Plans for smaller towns with 10 lakh population model will be same. We have a cluster strategy..should have 14 such units in next five years, which is part of 1,000 crore expansion plan.
Any plans for domestic acquisitions?
Raghuvanshi: If there is a good relationship that can emerge we would definitely consider that but as of now nothing is actively happening. We believe in forging partnerships and the gap in the demand in the space of healthcare is so huge that infrastructure can't be created by one entity so all sort of partnerships are required. We are looking at it.
After heart and cancer specialty what’s next?
Shetty: We want to be procedure-oriented specialty. The idea is to be number one in the procedure ...like we are number one in heart treatment and 10% of India’s heart surgeries are done by us. We want to achieve similar scale for cancer. We want every hospital of us to be heart and cancer treatment hospital.
Is healthcare business recession proof?
Shetty: It is recession proof in the initial stages but if the country goes down then everyone will. As of now, it may not affect my business but we are concerned about what is happening in the country.
What sort of demand supply gap exists in the current scenario?
Shetty: There is acute shortage. We are short of one million doctors, two million nurses and close to three million beds. If you start 100 medical colleges for the next five years that would result into sufficient number of doctors by 2025..
Do you think PE companies are is losing interest in Indian healthcare?
Shetty: Only serious players are coming forward..you see the time frame they are looking at may not be the right time frame so they have to be patient . In this industry you just can’t get returns like IT industry ..but if they have the patience to wait long enough they will get the benefits.
Are you looking at raising money from PEs?
Shetty: We are sufficiently capitalized now. We are nowhere close to raising money and there is no such plan any soon.
