Why Asia Healthcare Holdings is backing Indian doctor entrepreneurs to address the supply deficit

Backed by PE firm TPG Growth, Bengaluru-based Asia Healthcare Holdings is now betting on specialty centres like Motherhood, which can be built and grown in five years. It has deployed $150 million in three years.

While Indian healthcare has made serious strides in the recent years, the country is still a very underserved market. According to the Association of Healthcare Providers (India) the total number of beds per thousand people is a dismal .9. According to the National Centre for Biotechnology Information the number of doctors per thousand people is only 1.34.

In order to address the multitude of issues that contribute to these worrying numbers, a crop of doctors have turned entrepreneurs. They, after all, are well-positioned to tease out the gaps in the sector.

Bengaluru-based Asia Healthcare Holdings is betting on these ‘docpreneurs’. At the helm of this venture owned by PE firm TPG Growth, which is owned by TPG Capital, is Vishal Bali, the executive who knows a thing or two about speciality healthcare delivery, having worked for Wockhardt for 18 years before it was acquired by Fortis in 2009.

He speaks to YourStory about what how the platform is betting on speciality hospitals to address the supply deficit in the Indian healthcare scenario.

The idea and the business

The idea for Asia Healthcare Holdings began to take root in 2015 when Vishal Bali was at TPG Growth. Since 2007, US-based TPG Growth has pumped close to $15 billion in upcoming businesses that have healthcare as a major vertical.

Vishal Bali of Asia Healthcare Holdings

“When we thought of the AHH platform there was a differentiated thought process. We wanted to invest in multiple companies where we build and grow the company along with the founders. It is a platform because a bunch of companies get common administrative support from AHH. It is very different from a buyout model, where a company has already scaled. We follow a build-and-grow model,” says Vishal Bali, CEO of AHH.

The idea was to invest in speciality centres founded by entrepreneurial doctors. TPG Growth then created a fully funded platform in the form of AHH to scale up small-format specialty hospitals, with Vishal heading the entire investment strategy. These specialty hospitals can bridge the gap in demand-supply in treatment with a bed size of 50 to 300 beds. “The key is replication of these small formats. With that hypothesis we started in 2016 where we invested American Oncology Institute, which was run by entrepreneurs,” says Vishal.

AHH took a majority share in the American Oncology Institute (AOI), founded by Cancer Treatment Services. The AOI was started in the US by leading oncologists in the University of Pittsburgh Medical Centre, one of the leading oncology providers in the US. In India, it had begun as an oncology hospital in Hyderabad. It has since then opened hospitals in Sri Lanka, Myanmar, Nepal, and Bangladesh.

In three years, AOI went from one hospital to 13. Refraining from laying out the details of the exit, Vishal says that it was great one for AHH. AOI’s revenue was $50 million when the company was sold in early 2019 for an undisclosed amount to Varian Medical Systems.

AHH has a strong operating capability to grow businesses because its core team takes care of operations, finance, project support and supply chain. The average amount invested in each centre is Rs 20 crore. Till now AHH has deployed $150 million in capital in total to AOI (now sold), Motherhood, Ampath Diagnostics (now sold as it was owned by CTSI), and Nova IVF.

Doubling down on mother and childcare

AHH made an undisclosed investment in Motherhood in 2016 and helped the chain grow from from three hospitals to 11. The idea was to grow from it from a birthing centre to a centre for children by adding neonatology, pediatrics, and other allied child care services. Now Motherhood can also receive premature babies from other hospitals.

To complete the birthing chain, it invested in Nova IVI Fertility in 2019. Nova IVF has 19 centres. With these two chains, AHH intends to create the largest mother- and child-focused healthcare platform in India.

“We will continue to work with entrepreneurs, doctors, executives with clinical acumen. The idea is to have multipliers in this model of specialty hospitals in small formats,’’ says Vishal.

AHH is now looking for doctors who run ophthalmology centres for its next set of investments. “We will be going after micro-markets,’’ Vishal confirms.

According to IBEF the hospital industry will be worth $132 billion in 2022, currently the market is around $70 billion. No wonder TPG Growth, through AHH, has made the right bets in the Indian market, with entrepreneurs tuned into the unique challenges plaguing the healthcare landscape of the country.

(Edited by Evelyn Ratnakumar)


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