Get full access to one story every week, and to summaries of all other stories. Just create a free account

Hospitals everywhere are bulking up. The mega-merger of Manipal Health Enterprises (MHE) and Fortis Healthcare, announced last week, has created the largest hospital chain in India. The dealmakers are happy; shareholders and patients will come next.

At a town hall on Wednesday evening, the Fortis Healthcare management played up the external circumstances—problems at group financial services company Religare Enterprises, and demonetisation—for pushing the hospital business up against the wall. Downplayed was the promoters’ Fortis assets mismanagement and its role in the sell-out.

The sale will continue to dominate the news cycle as shareholders seek more transparency, even vent their unhappiness at the valuation. Whether IHH Healthcare Bhd, the interested Malaysian healthcare conglomerate, will swoop in to placate the shareholders, is an unfolding story. What is certainly an upside, though, say many hospital owners in the country, is that Fortis’ management will now no longer be in old hands. The governance had diminished to the level where one of its leading hospitals, in Mohali, Punjab, was recently knocked off the empanelment of the Ex-Servicemen Contributory Health Scheme, throwing the occupancy at the city’s largest hospital to its nadir.

No small irony for a hospital group that is often lauded for having the best standard operating procedures (SOPs) in the industry.

The combined entity, whether under one or two brands, with 41 hospitals in more than 10 states, has an enviable opportunity to build an efficient juggernaut, cut shared costs, and pass on the benefits to customers. It needs leadership. Who brings that to the table, investor TPG or the Manipal Group, remains to be seen. There is no precedent, unlike, say, the technology sector in India.

For now, entrepreneurs are relieved because the deal lifts the investment gloom that had begun to pervade the industry, especially in the light of multiple fraud investigations at Fortis and regulatory blows from New Delhi. “We are happy that one more hospital industry benchmark is being created because so far, it was only Apollo [Hospitals]. For everything, from valuations to profitability, the investors we engage with cite the Apollo example,” says the founder of a hospital chain which has raised over $100 million in venture capital.

Nonetheless, do not mistake this as a merger to end all miseries (for Fortis, MHE and industry sentiments). If the deal isn’t executed with transparency and if resources are frittered away, it could unleash bigger challenges on the sector.

Investors on the prowl

American alternative asset firm, TPG has been kicking the tyres for a while. In a conversation with The Ken in late 2016, a senior TPG executive noted that the Fortis buyout was a straightforward deal. One where it found enough headroom for its capital growth—Fortis share was trading at Rs 180, much below Apollo’s at Rs 1179, which itself was Rs 300 lower than its previous year’s share price.

AUTHOR

Seema Singh

Seema has over two decades of experience in journalism. Before starting The Ken, Seema wrote “Myth Breaker: Kiran Mazumdar-Shaw and the Story of Indian Biotech”, published by HarperCollins in May 2016. Prior to that, she was a senior editor and bureau chief for Bangalore with Forbes India, and before that she wrote for Mint. Seema has written for numerous international publications like IEEE-Spectrum, New Scientist, Cell and Newsweek. Seema is a Knight Science Journalism Fellow from the Massachusetts Institute of Technology and a MacArthur Foundation Research Grantee.

View Full Profile

Subscribe to read this story

The Ken is the only business subscription you need. Questions?

 

Premium

  • 5 original and reported longform business stories every week
  • Access to ONLY India edition
  • Close to 250 exclusive stories every year
  • Full access to over 6 years of paywalled stories
  • Pick up to 5 premium subscriber newsletters
  • 4 original and reported longform business stories each week
  • Access to ONLY Southeast Asia edition
  • Close to 200 exclusive stories every year
  • Full access to all paywalled stories since March 2020
  • Pick up to 5 premium subscriber newsletters

Rs. 2,750 /year

$ 120 /year

India Edition
Subscribe Subscribe
Most Asked For

Borderless

  • 8 original and reported longform business stories each week
  • Access to both India and Southeast Asia editions
  • Close to 400 exclusive stories every year
  • Full access to over 6 years of paywalled stories across India and Southeast Asia
  • Unlimited access to all premium subscriber newsletters
  • Visual Stories

Rs. 4,200 /year

Subscribe
 

Echelon

  • 8 original and reported longform business stories each week
  • Access to both India and Southeast Asia editions
  • Close to 400 exclusive stories every year
  • Full access to over 6 years of paywalled stories across India and Southeast Asia
  • Unlimited access to all premium subscriber newsletters
  • Visual Stories
  • Bonus annual gift subscription
  • Priority access to all new products and features

Rs. 8,474 /year

Subscribe
Or

Questions?

What kind of subscription plans do you offer?

We have three types of subscriptions
- Premium which gives you access to either the India or the Southeast Asia edition.
- Borderless which gives you complete access to The Ken across both editions
- Echelon which gives you complete access to The Ken across both editions along with a bonus gift subscription

What do I get if I subscribe?

The Premium edition gives you access to stories in that edition along with any five subscriber-only newsletters of your choice.

The Borderless and Echelon subscription gives you complete access to The Ken across editions and unlimited access to as many newsletters as you like.

What topics do you usually write about?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics. We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

Our specialised subscriber-only newsletters are written by our expert, award-winning journalists and cover a range of topics across finance, retail, clean energy, cryptocurrency, ed-tech and many more.

How many newsletters do you have?

We are constantly adding specialised subscriber-only newsletters all the time. All of these are written by our team of award-winning journalists on a specialised topic.

You can see the list of newsletters that we publish over here.

Does a Premium subscription to your Indian edition get me access to the Southeast Asia edition? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

We recommend the Borderless or the Echelon Plan which will give you access to stories across both editions.

Do you have a mobile app?

Yes! We have a top-rated mobile app on both iOS and Android which allows you to read on-the-go and has some amazing features like the ability to bookmark stories, save on your device, dark mode, and much more. It’s really the best way to read The Ken.

Is there a free trial?

You can sign up for a free account to experience The Ken and understand our products better. We’ll send you some free stories and newsletters occasionally, and you can access our archive of previously published free stories. You can stay on the free account as long as you’d like.

The vast majority of our stories, articles and newsletters can be accessed only by a paid subscription.

Do you offer any discounts?

Sorry, no. Our journalism is funded completely by our subscribers. We believe that quality journalism comes at a price, and readers trust and pay us so that we can remain independent.

Do you offer refunds?

No. We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Just write to us at [email protected] with details. We’ll help you out.

I have a few more questions. How can I reach out to you?

Sure. Just email us at [email protected] or follow us on Twitter.