Swedish healthcare provider Medicover's India business is on track to have all 25 hospitals in its network become profitable within 18 months, driven by rising occupancy and demand for specialised care, a top executive said on Wednesday.
Earlier this month, global investment firm KKR signed a deal to buy Medicover's India business for €1.2 billion ($1.40 billion), pending regulatory approvals.
"Our debt position was increasing, and it was becoming difficult to sustain, which led us to talking to private equity and strategic partners (for funds)," Medicover India's Executive Director Harikrishna P told Reuters in an interview.
Of the 25 Medicover hospitals in India, 19 are profitable, he said, adding that the group expects core profit margins to improve to 20-25% from 14% currently, in the next 12- 18 months.
The hospital chain, which has an overall bed capacity of 6000 beds, plans to increase its occupancy by 67% to 4000 beds in the next 18 months, he said.
The funds from the KKR deal will be used to scale up Medicover's existing facilities and increase operational and chargeable beds, he said, adding that the name will be changed once the deal receives regulatory approvals.
KKR's buyout adds to a string of private equity investments in Indian healthcare, after the firm's investments in Baby Memorial Hospital and Healthcare Global.
The deals reflects increasing global private equity interest in India's healthcare market, driven by growing demand for healthcare amid a high chronic disease burden and greater insurance penetration.
