Hospital chains vouch for overseas expansion
New Delhi, Aug. 9: India’s top hospital operators are looking to expand overseas to leverage their strengths in other markets as well as to attract medical tourists, officials and analysts say.
Industry leader Apollo Hospitals is looking for contracts to manage hospitals abroad, while Fortis Healthcare is aggressively looking for acquisitions as an expansion strategy.
However, officials at both companies said they continue to focus on their local expansion plans as well, where the potential continues to remain high.
There is ample growth opportunity in India, which the hospital chains are aggressively tapping, but these companies still need to go overseas to enhance their brand value, which will drive up medical tourism, said Mr Rashesh Shah, an analyst with Mumbai-based brokerage ICICI Securities.
“If Indian firms can buy some good hospital brands overseas, they can easily earn the trust of overseas patients,” Mr Shah added.
India’s healthcare sector, estimated to touch $14.2 billion by 2012 from $9 billion in 2006, according to a study by consultancy firm KPMG last year, offers huge opportunity although not enough to quench the global ambition of Indian operators.
An overseas acquisition can give Indian hospital chains access to advanced knowledge base and technology and also help it offer cheaper drugs and services to the patients at target companies, said Ms Sapna Jhawar, an analyst with Mumbai-based brokerage Sharekhan.
Fortis said it was looking for opportunities in Asia, but analysts say there could be good opportunities in other regions as well.
“Indian companies can explore opportunities in countries in Asia and Africa, where people have money but don’t have good health infrastructure,” said Mr Nair, partner at consulting firm Ernst and Young, adding opportunities of offering cost-effective services also existed in UK.
Apollo has a stake in a Mauritius hospital—its only investment overseas-—but manages a few hospitals on contract overseas.
The operations and management business overseas is significant in terms of profitability, but not in terms of turnover, Mr Venkataraman said, adding the Apollo will continue to look for more such opportunities. Meanwhile, Fortis is preparing for other opportunities beyond India to become Asia’s healthcare leader after it lost out in the race to acquire Singapore-based hospital chain Parkway Holdings. Apollo too plans to add 3,000 beds in four years to it current capacity of about 8000 beds, chairman Dr Prathap C. Reddy said.
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