IHH Healthcare Aims To Nearly Double Hospital Beds In India To 10,000 By 2031
By Fatin Umairah Abdul Hamid
KUALA LUMPUR, Aug 16 (Bernama) -- Private healthcare provider IHH Healthcare plans to nearly double its operational hospital beds in India to about 10,000 by 2031 from around 6,100 currently, with an estimated investment of about US$250,000 (US$1=RM4.08) per bed.
Dr Ashutosh Raghuvanshi, managing director and chief executive officer of IHH Healthcare’s Indian arm Fortis Healthcare, said the brownfield expansion of its hospitals would be primarily funded through internal accruals, while debt would be used for acquisitions and equity could be raised if required.
He said Fortis Healthcare also had strong support from its parent company, which intended to further expand in India given the country’s significant growth potential.
“We have strong support from IHH, which has already stated its intention to double down on the India opportunity, and since the company’s operations have already matured, further building this platform makes a lot of sense,” he told a media briefing at Fortis Healthcare in New Delhi, India, recently.
IHH Healthcare has established one of India's largest integrated private healthcare platforms through its subsidiaries, Fortis Healthcare and Gleneagles Healthcare India.
The network comprises 36 hospitals with about 6,100 operational beds, serving patients across 12 states including key healthcare markets like Delhi, Mumbai, Bengaluru, Chennai, Punjab, Kolkata and Hyderabad.
Ashutosh said Fortis planned to add about 400 beds this year, with capital expenditure (capex) expected to be around 700 crore rupees (about US$90 million).
He said Fortis had a healthy balance sheet, with a debt-to-earnings before interest, taxes, depreciation, and amortisation (EBITDA) ratio of 1.08 times, providing significant headroom to raise debt to fund its expansion, while equity could be injected if required for larger acquisitions.
Fortis’ capex stood at about US$75 million (about RM300 million) per annum, and the company could also undertake “creeping acquisitions” by purchasing shares from the secondary market, he said.
Ashutosh said the company expected to improve its EBITDA margin by about 1.5 percentage points annually, with the margin expected to reach around 25 per cent over the next few years from the current 21-22 per cent.
However, he said the margin could stabilise at around 25-26 per cent as new hospitals that had yet to mature came into the portfolio, while revenue was expected to grow by more than 15 per cent annually.
International patient demand
The oncology centre at Fortis Healthcare in Gurugram, India, receives about 30 per cent of its patients from international markets, mainly from the Middle East, Africa and Central Asia.
Ashutosh said demand from international patients had been affected by the West Asia conflict, particularly from Iraq and African countries, as many patients from Africa transit through the Middle East.
He said Bangladesh was another major source market for medical tourists to India, while Fortis was placing greater focus on the African market, where limited healthcare treatment options and cost sensitivity offered significant growth opportunities.
IHH Healthcare group chief corporate officer Ashok Pandit said Turkiye and Europe were the largest contributors to the group’s first-quarter revenue, followed by Singapore, Malaysia and India.
According to him, India’s contribution would take time to reach the level of other key markets as IHH fully owns its operations in Singapore and Malaysia and holds a 90 per cent stake in Turkiye.
IHH Healthcare owns 31.1 per cent of Fortis, having acquired the controlling stake in 2018.
Meanwhile, Ashok said, its Malaysian operation was expected to record double-digit growth again this year, having registered growth of 10-12 per cent in 2023, 2024 and 2025, while Turkiye was expected to grow at a faster pace following a strong start to the year.
He said IHH would also place greater emphasis on ambulatory care centres, particularly in Malaysia, to bring healthcare services closer to patients and reduce costs by complementing inpatient care treatment, rather than relying solely on expanding hospital bed capacity.
In Malaysia, the group operates a large network of 18 hospitals with about 3,600 beds, treating hundreds of thousands of patients every year through brands such as Gleneagles, Pantai, Prince Court, Island Hospital, and Timberland Medical Centre.
IHH Healthcare is a publicly traded multinational company with the largest controlling shareholder being Japan's Mitsui & Co, followed by the Malaysian government’s sovereign wealth fund Khazanah Nasional Bhd.
-- BERNAMA