Single specialty hospital chains are here to stay: Vishal Bali, executive chairman, Asia Healthcare Holdings

by Aditya Kumar

Asia Healthcare Holdings (AHH) has been making waves in India’s healthcare industry by focusing on single-speciality hospitals. Backed by TPG Growth and GIC, AHH recently acquired a majority stake in Asian Institute of Nephrology and Urology (AINU) with an investment of ₹600 crore. AINU is the largest hospital network in India specializing in urology and nephrology care.

In an interview, Vishal Bali, Executive Chairman of AHH, discussed the success of their strategy in investing in single-specialty networks. Bali, who has over 30 years of experience in the healthcare sector, explained that AHH aims to invest, transform, and grow a range of single-specialty enterprises under one holding company. The unique aspect of AHH’s approach is that their team takes on operating and execution responsibilities in each company, working alongside the CEOs and operating teams.

This platform approach has proven to be successful, with AHH achieving rapid scale and positive unit economics in each of their enterprises. For example, they grew Cancer Treatment Services International (CTSI) from one oncology hospital to 11 in just three years, and the Motherhood Women & Children’s hospital network expanded from three to 22 hospitals in six years. Nova IVF, their fertility chain, also scaled from 18 centers to 70 centers in three years.

When asked about their success in the inorganic route, Bali explained that they have taken majority control of their companies at relatively early stages of development, but each company had excellent clinical differentiation. This foundation allowed them to build top-class clinical and management teams, establish market-leading customer service processes, secure appropriate capitalization, and create strong brands. While the inorganic route provided the starting point, AHH has mainly focused on organic growth and scale afterward.

The acquisition of AINU was driven by the growing demand for urology and nephrology care in India. Bali highlighted that Indians have a high incidence of urinary tract infections, kidney stones, and non-cancerous prostate enlargement issues. Additionally, there has been a rise in the incidence of urological cancer in the last decade. AINU is the only enterprise in India that has taken a leadership position in urology and nephrology specialty care, making it a valuable addition to AHH’s portfolio.

Looking at the Indian healthcare sector as a whole, Bali emphasized that private healthcare in India is among the lowest-cost providers globally, despite the majority of consumables and medical technology being imported and the depreciation of the Indian rupee. He also acknowledged that the government plays a crucial role in providing affordable healthcare by leveraging its vast resources and infrastructure.

However, there are challenges that the Indian healthcare sector needs to address to reach global standards. Bali pointed out that while Indian clinicians and medical institutions are highly qualified and experienced, there is a significant demand-supply gap due to the lack of enough doctors and nurses graduating from medical and paramedical teaching institutions.

Overall, AHH’s focus on single-specialty healthcare delivery platforms has proven to be a successful strategy. With their recent acquisition of AINU and their track record of rapid scale and positive unit economics, AHH is well-positioned to continue making a positive impact in India’s healthcare industry.

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