At least 175. That is the number of hospital owners looking for a buyer or a lessee in India. These hospitals, holding anywhere from two to 1200 beds, have alarming vital signs. The nursing homes and neighbourhood hospitals in urban India, which keep the Indian healthcare delivery ticking, are in distress. Ever since came up a year ago, it has been busy connecting hungry investors to hamstrung hospitals. Except some are more choosy than others.

Rohit Kapoor, senior director at Max Healthcare in Delhi, is inundated with proposals for acquisitions, alliances or management takeovers of hospitals. Given that it’s his job to expand the group’s hospital business, this must make things easy? But due to the size, location and a lack of other technical requirements, he ends up rejecting most prospects. Max Healthcare has acquired stakes (and not complete ownership) in only two hospitals so far—Pushpanjali Crosslay Hospital and Saket City Hospital in the National Capital Region (NCR).

By connecting a struggling hospital owner to the right buyer, hospital-for-sale-lease-dot-com’s founder Amrit Pal Singh may have systematised the fire sale, but can he arrest it? “If the hospital is not a big brand, one would have to hire famous specialist doctors to attract patients, and since the number of patients is small in the beginning, a third of the spending is taken over by consumables,” says a doctor who started a 100-bed hospital in Ludhiana, Punjab, six years ago but had to auction it four years later. The thought of paying off a Rs 20-crore ($3.08 million) bank loan kept him so preoccupied that he could hardly focus on patients. He has returned to teaching at a medical college but continues to dream of starting another hospital.

His observation about brand-value holds merit, for branded hospital chains, unlike his hospital, don’t face the same challenges. Whether it’s private equity-backed hospitals or those looking for a public listing, small hospitals are being swallowed whole by the big fish like never before.

In the last three months, these hospitals have gone public: Shalby, Aster DM and KIMS Hospital, headquartered in Ahmedabad, Dubai and Trivandrum, respectively. Each one of them acquired many small hospitals as they sped towards the stock market. Shalby, which grew from 200 to 2000 beds in five years, bought out three hospitals and built four. In a rare example, Aster DM acquired more hospitals than it built—seven against one. The reason, it stated in its prospectus, was to “expand our operations” and “consolidate our presence”.

When it comes to hospitals, buying is clearly the new building. There have been two major expansion trends in healthcare in India. In 2004-05, hospital chains established large tertiary care hospitals in big cities.


Ruhi Kandhari

Ruhi writes on the impact of healthcare policies, trends in the healthcare sector and developments on the implementation of Electronic Health Records in India. She has an M. Sc. in Development Studies from the London School of Economics.

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