This marks their first meaningful expansion since covid, which slowed or halted their growth for four years.
Manipal Hospitals, Aster DM Healthcare, Apollo Hospitals and Max Healthcare are among the healthcare majors working to add more beds in the coming years. Aster DM Healthcare, a Bengaluru-based premium healthcare provider, is looking to invest more than ₹2,000 crore to double its bed capacity to 10,000 over the next three years through acquisitions and organic growth.
Unlisted Manipal Hospitals, which recently acquired a majority stake in Kolkata-based healthcare group Medica Synergie for an estimated ₹1,400 crore, has said it will increase its presence across the country through a mix of organic and inorganic expansion. Max Healthcare, a Delhi-based hospital chain, also made acquisitions recently and has big expansion plans.
Smaller players such as CK Birla Hospitals and Paras Hospitals have plans to expand and strengthen their presence in existing markets as well. Paras Hospitals recently announced the commissioning of a new 300-bed hospital in Gurugram with an estimated investment of ₹250 crore. It plans to increase its capacity from 2,000 beds to 3,500 beds by 2025.
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CK Birla, meanwhile, is expanding in the Delhi National Capital Region and is in advanced stages of commissioning two to three new hospitals over the next 12 to 18 months.
“We are looking to expand beyond Delhi NCR as well, and this investment would be about ₹1,000 crore. We also have an expansion planned at our Jaipur hospital. After all this we could have more than 1,500 beds in the country,” Akshat Seth, vice chairman of CK Birla Healthcare told Mint. It currently has around 1,200 beds.
Medicover Hospitals, a multinational specialty hospital group, has big expansion plans in India, too. The Swedish group plans to double its bed capacity in and around Maharashtra, Andhra Pradesh, Karnataka, and Telangana.
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“We as a country have quite a shortage of beds and with the population growing there is a huge demand-supply gap. But the economy is strengthening and the middle class is also growing rapidly, so there is a change in dietary habits leading to an increased need for healthcare,” Anil Krishna, chairman and MD of Medicover Hospitals told Mint. “In the next decade or so, spending on healthcare will continue to increase as disease patterns also change with changing habits.”
Medicover currently has more than 5,500 beds in these states and plans to increase this number to 10,000 and beyond in the next five years. “The company will deploy roughly ₹2,000 crore for these purposes,” Krishna said. The group will inaugurate a 300-bed hospital in Bangalore on Thursday.
Jagat Pharma, an Ayurvedic healthcare group, plans to invest ₹100 crore to expand to cities such as Pune, Bangalore and Chennai.
Covid brakes are off
Industry watchers said the sector has plenty of room to grow beyond the current expansion plans. “[Healthcare] is a fragmented sector. There is a lot of opportunity to grow and consolidate and we just want to continue our growth momentum,” Dilip Jose, MD & CEO of Manipal Hospitals told Mint.
Analysts attributed the growth in the sector to – among other things – rising insurance penetration on the back of the pandemic and government’s PM Jan Arogya Yojana, which aims to offer free health insurance to 550 million citizens.
Mehul Sheth, deputy vice president, institutional research (pharma and healthcare) at HDFC Securities, said, “There are multiple reasons for bed-capacity expansion, such as increasing cases of non-communicable diseases, insurance penetration, and also because the utilisation levels for some hospital chains are reaching optimal levels of 75 to 80% (for example, Max Healthcare is running at 75-76% occupancy).” HDFC securities estimates India’s healthcare sector will grow at a compounded annual growth rate (CAGR) of 11-12% over the next five years.
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According to data from the Insurance Regulatory and Development Authority (IRDAI) and the red herring prospectus of Medi Assist, the number of people with medical insurance in India has more than doubled from 216 million in 2014 to an estimated 594 million as of March 2023. According to government accounts, health insurance premium collections grew 40% in 2020 because of the pandemic.
Analysts said large cities would be the main beneficiaries of the expansion plans. “Metros are expected to remain focal points for this capacity expansion. Cities such as Delhi NCR, Mumbai and Bangalore are expected to witness sizeable bed additions in the next few years,” said Mythri Macherla, assistant vice president & sector head at ICRA. The rating agency estimates that private firms will invest ₹32,500 crore to add more than 30,000 beds in the next four to five years.