Azad Moopen, the man behind Aster DM Healthcare, one of the largest private healthcare service provider across the Gulf countries and south India, has hailed the recently announced Budget as “visionary” from the healthcare perspective, and feels the measures announced by Finance Minister Arun Jaitley will help improve availability of quality healthcare even in the smaller towns.
Jaitley, last week, while presenting the Budget, announced plans to launch a flagship National Health Protection Scheme to cover over 10 crore poor and vulnerable families (which is about 50 crore beneficiaries) providing health care of up to Rs 5 lakh per family per year for secondary and tertiary care hospitalisation.
“Its a very visionary budget from the healthcare point of view, what the government has proposed. I think that it is going to produce a significant change in the healthcare scenario of the country. Main thing is that a huge number of people are going to be covered, about half the population; Rs 5 lakh per year for a family is a sufficient amount for covering many of the major illnesses. This will enable more families to access good quality healthcare,” Moopen told THE WEEK.
Azad Moopen, chairman of Aster DM Healthcare | Aster DM Healthcare
Separately, the Budget also proposed setting up of 24 new government medical colleges and hospitals by upgrading existing district hospitals in the country, to ensure there is at least one medical college for every three parliamentary constituencies.
Moopen feels this will, over time, create more availability of manpower in the medical sector and there is a possibility that in five to ten years, the tier II and tier III cities as well as the villages will have good amount of healthcare facilities available.
Aster DM Healthcare currently operates a network of 19 hospitals, 98 clinics and 206 retail pharmacies, across the Gulf countries and India. As of September 2017, it had total capacity of 4,754 beds, up from 1,419 in FY2013.
Moopen said that the company had planned to focus on the metro markets in India for growth and expansion. However, those plans could now be changed, in the wake of the Budget, which will open tremendous opportunities even in the smaller markets.
“Our strategy till about one week back was that we will focus on larger cities and we have good experience that this works. We started a 670-bed hospital in Kochi, which became EBITDA (earnings before interest, taxes, depreciation and amortization) breakeven in two-and-a-half years. However, with what has come now (in the Budget), I think, there is a serious case for us to look into tier II and tier III cities,” he added.
In India, Aster DM Healthcare is currently present in south and west India. Moopen said that there was sufficient opportunity to expand in these two regions, and the company would only gradually look at other areas, once it had stabilised in the south and west. The company is also open to acquisition opportunities.
Aster DM Healthcare is hitting the capital market with an Initial Public Offering to raise Rs 725 crore. The IPO also includes an offer sale for up to 1,34,28,251 equity shares by promoter Union Investments. The price band for the issue has been set at Rs 180-190, and it will be open for subscription between February 12-15.
The proceeds from the IPO will be used to pay back high cost debt and buy medical equipment.
As a part of its future expansion plans, the company has earmarked a capital expenditure of $130 million to set up five hospitals in the Gulf and five more in India.
