UK-based healthcare services firm Bourn Hall International is investing $100 million (around Rs 540 crore) in its Indian subsidiary to finance an expansion plan to set up 18 new fertility clinics in India by the end of FY16.
The Indian arm of the company, which in turn is majority-owned by the private equity firm TVM Capital MENA, is currently operating two fertility clinics located in Kochi and Gurgaon.
“In-vitro fertilisation (IVF) as a sector does not have any emerging leader as of now. So this is a major opportunity for a brand to scale up operations in the country,” Gaurav Malhotra, Bourn Hall India’s MD and CEO, told VCCircle.
According to Malhotra, the company will follow a hub-and-spoke model and will set up four-five satellite clinics for each of their 18 clinics.
The UK-based parent also operates six clinics in its home market besides one in Dubai.
“There is a big opportunity in emerging markets like India and this is our first investment in the healthcare sector in the country,” said Youssef Haidar, partner at TVM Capital MENA, part of the TVM Capital network.
TVM Capital MENA is a regional private equity firm dedicated to the healthcare sector. It targets the Middle East, North African and Indian markets. Bourn Hall India is its first India exposure through the investment in the UK parent.
“IVF is one of the verticals we looked at in the country and that opportunity was driven by the fundamentals of demand and supply in the emerging markets. There is a high demand and there are not many players on the supply side, and a lot of supply qualitatively is not where it should be,” added Haidar.
The upcoming clinics of Bourn Hall India will be located across the country, spanning Punjab, Gujarat, Maharashtra, Jammu & Kashmir, Karnataka and Uttar Pradesh. The existing two facilities of the company are spread across 25,000 sq. Ft., according to Malhotra.
For expansion, the company will primarily look at greenfield opportunities. “We will be looking at starting greenfield centres because we don’t want to dilute our brand,” said Malhotra. However, the company will not rule out inorganic expansion if an appropriate opportunity comes up.
Competition and pricing
There are a number of companies providing IVF services in India. While some specialise in this space, even offshoots of large hospitals offer these services.
Bourn Hall comes with a high pedigree, though. The founders of the company, Sir Robert Edwards and Patrick Steptoe, invented conception through IVF and delivered the first test tube baby of the world in 1978.
From a price point, Bourn Hall will look at volume and keep its pricing competitive, said Malhotra. “Our founder’s vision was to bring IVF to the masses. So we will not be at the premium end of the market. We will be at a price point, which is in competition with other IVF chains in the country,” he added.
“Our competitive edge is about technology as we are a science-based company. Our founders won the Nobel Prize for infertility treatment. There are only two Cleanroom Labs in Asia which we operate, one in Kochi and the other in Gurgaon,” observed Malhotra.
According to him, Cleanroom Labs require a huge amount of investment which the company is prepared to make for each centre. Bourn Hall will invest around Rs 30 crore for each of its IVF clinics, added Malhotra.
(Edited by Sanghamitra Mandal)