Bajaj Group eyes healthcare venture as hospital bed demand rising steadily

The healthcare business venture is likely to be headed by Nirav Bajaj, who currently oversees corporate strategy at Mukand. However, the investment plans have not yet been finalised

Bajaj Group is readying to foray into healthcare through a chain of hospitals, claimed reports. The investment plans are not yet finalised.

The healthcare business venture is likely to be headed by Nirav Bajaj, who heads corporate strategy at Mukand.

As such the hospital sector is on a growth trajectory. Top Indian private hospital chains have announced major expansion plans for financial year 2024-25 (FY25) on the back of reporting a growth in average revenue per occupied bed (ARPOB) per day in financial year 2023-24 (FY24), indicating increasing demand for services. 

India is a largely underserved country when it comes to healthcare coverage. Consider these statistics: India had just 5 beds and 8.6 doctors for every 10,000 people, according to the OECD. These readings are among the lowest in the world.

 

According to the Ministry of Health and ICICI Sec, the life expectancy in India is likely to cross 70 years by 2031, leading to a rise in the ageing population. The share of senior citizens in the population is expected to rise to 13% in 2031, up from 8.5% in 2011.

This demographic shift will drive domestic demand for healthcare. Another major driver of healthcare demand is the rise in non-communicable diseases, particularly cardiac ailments, with changes in lifestyle. This may be the right time to get into the sector for Bajaj Group.

This may also be the rise of the next generation in the house of Bajaj where Niraj Bajaj, chairman of Bajaj Auto, would be heading his own venture which is a diversification for the 96-year-old Jamnalal Bajaj founded business house. Niraj is also the chairman and MD of Mukand which makes specialty steel products.

Meanwhile, Bajaj Auto MD Rajiv Bajaj’s son Rishab joined Bajaj Auto in FY22 as management trainee and currently holds the designation of divisional manager (product strategy – electric vehicle) in the company.

The new healthcare venture has also set up an office in Lower Parel in Mumbai.

It is not clear whether the family office of the Bajaj promoters would be investing in the healthcare venture, or the Group companies would be making investments. The Group companies include Bajaj Holdings and Investments (investment arm), Bajaj Auto, Bajaj Finserv, Mukand Industries, Bajaj Electricals and Hercules Hoist (materials handling).

Bajaj Group operates through a family council which includes the late Rahul Bajaj’s cousins Shekhar, Madhur and Niraj; his sons Rajiv and Sanjiv. This was formed around three years back and they meet once in one and a half months to discuss business and family matters.

In March, Bajaj Group had committed ~5000 crore to social impact initiatives over five years with a sharp focus on skilled development under ‘Bajaj Beyond’ – the Group’s new identity for all its corporate social responsibility (CSR) and charitable programmes. 

The idea is to benefit over 20 million youth and enable them to take advantage of the employment and entrepreneurial opportunities offered by India’s growing economy.

In the last ten years the Bajaj Group has contributed close to ~4000 crore towards various CSR initiatives, mostly focused on skilling and education, health, livelihood, water conservation, and several other areas of development.