Venture Capital firm Sequoia Capital is investing up to $22 million to acquire an undisclosed stake in Moolchand Medcity, a Delhi-based healthcare company, at least two sources briefed with the matter told VCCircle.
Located in the heart of Delhi, Moolchand Medcity is being developed as Asia’s largest single site multispecialty hospital campus (six specialty hospitals and 1,000-plus beds). It claims to be India’s first JCI and comprehensive NABH (Hospital and Blood Bank) accredited hospital. The company is promoted by first-generation family entrepreneur Shravan Talwar who is also the CEO of the company.
In response to an e-mail query, a Sequoia Capital spokesperson said that the company would not like to comment on the development.
According to industry experts, Moolchand’s focus on the right therapies and its emphasis on building an efficient business model, combined with the prime location of the hospital, make it an interesting play for investors.
There have been various investments in the healthcare space in the recent past. Recently, Seedfund and Aquarius India invested $10 million in Vaatsalya, a healthcare services company specialising in gynaecology, pediatrics, general surgery and general medicine. The funding will be used to set up a network of low-cost hospitals across the country.
Apollo Hospitals, India’s second largest healthcare services provider, had also raised Rs 330 crore through a QIP to part-fund a Rs 1,100 crore investment to add 2,400 beds by March 2014. In July 2011, Advanta India, the listed subsidiary of United Phosphorus Ltd, raised $50 million through an FCCB issue.
"From a macro perspective, Indian healthcare has always been (and will continue to be) attractive. It is a $35 billion market, projected to grow at 15 per cent per annum," said V Krishna Kumar, head & executive director (pharma & Lifesciences) at Avendus Capital.
But for investors, the challenge lies in being able to find investible assets at the ground level. A major portion of the Indian healthcare delivery industry operates in a ‘not-for-profit’ set-up and such assets are not ‘investible’ from a financial sponsor’s perspective. The few scaled-up players in the corporate healthcare delivery space are mostly in multispecialty tertiary care. Over $1.3 billion of private equity has been absorbed by the (corporatised) Indian healthcare delivery sector in the last five years. The most visible trend in healthcare investing has been the shift in investor interest from ‘multispecialty tertiary care’ model to ‘single-specialty day-care’ model, added Krishna Kumar.