BackDubai’s DM Healthcare plans to invest `4,000 crore in India
The India expansion is part of the firm's plan to become a global healthcare chain by 2017
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Mumbai: Dubai-based healthcare group DM Healthcare Llc is planning to invest at least ₹ 4,000 crore in four years in the fast-growing Indian healthcare market, a top executive said.
The expansion in India is part of the firm’s plan to become a global healthcare chain by 2017 by also expanding to other Asian countries and Africa, Azad Moopen, a non-resident Indian physician who is the firm’s promoter, chairman and managing director, said in an interview last week.
DM Healthcare posted a revenue of ₹ 2,100 crore in fiscal year 2013 and expects a 50% growth in the current fiscal year, according to information provided by the company, which is a leading healthcare chain in the Gulf region with a network of about 156 establishments including hospitals, clinics, diagnostic centres and pharmacies.
The group, which has a capacity of about 1,700 beds, will increase it to 5,000, a large portion of which it hopes to build in India.
“In addition to the healthcare complex Aster Medcity, the project that we have already planned at Kochi in Kerala with a total investment of $300 million (around ₹ 1,840 crore today), we will look at two more projects in the state along with at least a dozen greenfield and existing hospitals spread across Karnataka, Tamil Nadu, Andhra Pradesh, Maharashtra and Gujarat in the first phase of our India expansion," said Moopen.
The Kochi project, which will have a 570-bed multi-specialty hospital and a four-star hotel along with residential apartments in a 40-acre plot, is expected to be opened by the first quarter of 2014.
DM Healthcare has two existing associate hospitals with a combined bed capacity of 800, running at Kozhikode and Kottakkal in Kerala, and is planning to start another 200-bed hospital at Kannur in northern Kerala. Besides, it has also started a medical college in the state located in the northern district of Wayanad.
In Maharashtra, it has identified locations for setting up new hospitals though it currently runs two hospitals in Kolhapur and Pune.
The Dubai group’s expansion plans in the Indian healthcare space come at a time when the country’s leading hospital service providers Fortis, Apollo and Manipal Group are adopting diverse strategies as they ready themselves to tap the expanding healthcare services market in India and other emerging economies.
DM Healthcare’s plans are similar to the strategy of India’s top two hospital chains—Fortis Healthcare Ltd and Apollo Hospitals Ltd.
While the country’s largest hospital chain Fortis Healthcare is sharpening its focus on the domestic market, Apollo Hospitals and Manipal Health Enterprises are eyeing both domestic and overseas opportunities in the mainstream hospital businesses and related areas.
On 1 October, Mint reported that Fortis Healthcare, Manipal Group and Apollo Hospital are in an expansion mode. According to the report, Fortis, India’s largest hospital chain, said it will be able to add another 1,500 beds, increasing its total capacity to 5,500 beds in the country by fiscal 2014.
The value of the Indian healthcare services industry, as estimated by consultancy firms EY and McKinsey and Co. in 2008, was around $35 billion and is projected to rise to about $150 billion by 2017.
“India offers huge potential for private healthcare providers as modern healthcare penetration is still too insignificant...and it is a proven fact that the government cannot be the sole provider to address existing and future demand," said Muralidharan Nair, partner (healthcare) at EY.
DM Healthcare, said Moopen, is also weighing options to list itself on the London Stock Exchange (LSE) and leading stock exchanges in India soon, and plans to raise funds from either the equity market or by term loans for the proposed expansion.
“The company may raise part of the finance required for the global expansion through an IPO and will get listed in London and India," said Moopen, adding, “We want to make the company publicly listed even though the amount to be raised from the capital market is yet to be decided."
If DM Healthcare opts for an initial public offering in the next few years, it will also give its private equity (PE) partners—Olympus Capital Asia Investments Ltd, a Hong Kong-based PE firm and India Value Fund Advisors—an exit route. At present, these PE investors jointly hold about 40% equity stake in DM Healthcare.
In 2012, another UAE-based healthcare group—B.R. Shetty-promoted NMC Health Plc, had raised $187 million through a listing on LSE.
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