New Delhi: Corporates and investment firms are lining up funds in the hospital sector in India, sensing the vast potential offered by a mix of poor facilities, changing disease profiles and demand for quality healthcare.
India has only 0.7 beds per 1,000 people, far below the global average of 2.6. The country needs $50 billion annually for the next 20 years to meet the healthcare needs of its rapidly expanding population, a recent study by industry body CII said.
India needs to add 2 million beds to the existing 1.1 million by 2027, and requires immediate investments of $82 billion to make up for its infrastructure deficit, the CII study said.
“All our hospital beds are full. So unless we expand, you can’t see top- and bottom line really grow,” Apollo Hospitals Enterprise Ltd chairman Prathap Reddy said.
Apollo, which has 39 hospitals in India, will spend 8 billion rupees by 2009 and take up its bed count to 9,600 from 8,000 now.
Competitor Fortis Healthcare Ltd will add 28 hospitals to its 12-hospital chain by 2012, Chief Executive Shivinder Singh has said.
“The sector is getting focused from an investment perspective. The drivers for the future are falling in place,” said Vishal Bali, chief executive of Wockhardt Hospitals, which has plans to up its chain to 30 hospitals, from 15, in two years.
“Hospital companies in India would have a predictable and steady revenue stream, given high unmet demand and low but growing penetration of organized healthcare,” Citigroup said in a note to investors.