Long ago, Devi Shetty, the venerable and the famous cardiologist behind Narayana Hrudayalaya, had said that his hospital was not welcomed in Delhi – a city dominated by five-star private sector hospitals. It may not be wrong to assume that these five-star hospitals would have thwarted the entry of an affordable yet high-quality entity like Narayana Hrudayalaya. Further, most of the private sector hospitals in Delhi are set up on land given away at throwaway prices but still charge patients an exorbitant rate. The challenge for Shetty was apparent. His company finally got around that conundrum last year when it acquired an existing hospital, Dharamshila, in the eastern part of the national capital. The Bengaluru-based chain has now got onto turning that into a multi-specialty unit from a cancer-alone establishment.
“Dharamshila facility will become from a cancer-alone hospital to kind of a super specialty hospital. So luckily there is space and there is a possibility of creating another wing which the original trust is going to build and we are going to have a cardiac center, renal center, neurosciences center as well within that facility,” Ashutosh Raghuvanshi, Vice Chairman, Group Chief Executive Officer and Managing Director of the NSE-listed group told in an interview. He said the hospital would be expanded to have 400 beds in one-and-a-half to two years. “So when we started managing the hospital from the trust, at that time the facility was only operating 140 beds. So there was an infrastructure created for about 240 beds. Now with the new expansion which will happen over and next 18 to 24 months or so, we would be able to enhance its capacity to about 400 beds,” he said.
Raghuvanshi said there was a myth around the spending power in Delhi. He said there was a belief that Delhi was a market for the affluent and that everybody could pay, something that was not correct. He said Delhi attracted a large number of patients from outside the city as well and they were faced with only two choices – either go to overcrowded government hospitals or go to very expensive private hospitals. “So that is the idea that we remain a mid-segment player which is between a public and absolutely private,” he said. The 25-year-old Dharamshila cancer hospital was a prized catch not just for Narayana Health or NH, as the group abbreviates itself. It came as a boon for the east Delhi residents also who till then had access to only four decent private hospitals – one each in their part of the capital and Ghaziabad and two in Noida. East Delhi lags the rest of Delhi in having good, private hospitals despite being home to one-third of the capital’s population and its residents often go to Noida, Ghaziabad for south Delhi for treatment.
“We did not get an appropriate opportunity in the NCR region and the entry barrier is huge. Prices of land and properties, freehold properties in Delhi are sort of unheard of and it’s not possible. Within the broader NCR region as you mentioned, there could have been some opportunities but we did not want to do just a peripheral center unless we had some foothold or presence,” Raghuvanshi said, explaining why it took long for the hospital operator to set up a unit in Delhi. He said the chain would look to build or acquire hospitals not just in Delhi but also in the areas adjoining the national capital – namely Faridabad and Ghaziabad. Narayana Hrudayalaya’s Delhi foray last year coincided with another inorganic expansion in Gurugram in neighbouring Haryana where the Bengaluru chain managed to acquire a greenfield but a non-operating unit. NH is now also looking overseas and the countries it is eyeing are those in the SAARC region and Africa. The group has partnered a private equity firm to set up a greenfield hospital at Nairobi in Kenya.
“We are minority stakeholder but we will be operating it. Africa would be also an area which in future, not right now, but in next 5 to 6 years, should be an area of interest. It’s planned to be a heart hospital initially, heart and kidney care hospital. It will be a modest scale initially, about 100-150 beds,” Raghuvanshi told. He said the hospital would stay true to its asset-light model approach and look to treat the ‘working classes. He said while NH hospitals would treat the rich, the group did not build them keeping the rich in mind. “We will also treat the rich but we haven’t built the hospitals for rich. You need both,” he said. – Money Control