Low capital and investment-friendly business models have created a surge in single speciality hospitals
The last few weeks have seen a lot of activity around single speciality clinics being set up by the two largest hospital chains—Fortis Healthcare and Apollo Hospitals. Fortis Healthcare has invested around Rs 30 crore in setting up Renkare, a dialysis centre, while Apollo has set up a joint venture with GSK Velu, founder and MD, Trivitron, to launch dental and renal care centres.
The entrance of the large players only underlines what investors have found in healthcare—an investment-friendly business model. “Single speciality hospitals are PE-friendly business models which do not require high capex like that of hospitals and you can exit in a much shorter time,” says Amit Mookim, executive director, transactions & restructuring, KPMG. Previously, investors kept away from large hospitals as it not only required a large amount of capital, but also a long time to recover the investment as well as exit the business.
(This story appears in the 13 April, 2012 issue of Forbes India. To visit our Archives, click here.)