Yes that’s not a typo, Havells India the manufacturers of electrical equipment are all set to enter the tertiary healthcare sector in India.
The Havells brand is owned by QRG enterprises and they already run a tertiary care center in Faridabad. So they have some experience in the running of a hospital.
In the next 2-3 years we would see 5-6 hospitals set up by QRG in the NCR region in northern part of India. The company plans to raise debt to fund this diversification and fund the balance with internal cash reserves.
QRG enterprises plans to set up the chain under the name ‘QRG’ and plans to invest more than Rs 1000 crores into this push. It will start with the Rs 250 crore 450 bed super specialty hospital in Faridabad called ‘QRG Health City’.
Now this is not the first time that a business has ventured into Healthcare.
Apollo Tyres entered the Healthcare business under the brand Artemis and has a healthcare set up in NCR. There have been other examples of such diversification.
There are many reasons why businesses like to enter healthcare
Firstly the healthcare business is recession proof.
Secondly the Indian healthcare sector is set to expand to Rs 280 crores in 2020 with a CAGR of 12%. There are very few sectors that will have double digit growth.
Thirdly the demand for healthcare is going to expand rapidly and the revenue cycles are faster as most of healthcare is paid for by patients from their pockets. So the revenue realization is much faster for this sector in India.
but is this a viable option for businesses to take? Enter Healthcare at your own peril is my take on the matter, but what do you think about it? Please do let us know…
This Post Has 4 Comments
Interesting piece. I dont think one should enter a business because there is a future in it. One should enter a business if one has the capability to make a difference to those customers. Havells has a reputation of making safe electrical goods but not delivering quality health care. They would need more than money to run a hospital.
It would be advisable if QRG enterprises, the holding company, were to invest in a chain of hospitals provided they either have the expertise or leave it to a group of professionals from the industry. But for Havells to directly invest in this chain and publicise it would be disastrous because there is little connect between brand Havells and brand hospital.
I agree Arch, in my opinion its a bad idea as the business models are very different.
There is noticeably a bundle to know about this. I assume you made certain good points in features also.
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