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Billionaire Heiress Seeks Health-Care Fortune: Corporate India


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Nigeria

May.15.2014

Roshni Nadar Malhotra, the daughter of Indian billionaire Shiv Nadar, is stepping out of her father’s shadow to make a foray into health care. She’s using her family’s computer business as a springboard.

The 33-year-old plans to spend 10 billion rupees ($168 million) to build a network of health clinics to treat acute and chronic ailments including diabetes, asthma, stomach and skin conditions, she said in an interview. Her venture will start with 50 centers in and around New Delhi before expanding to small towns, the only offspring of the founder of HCL Technologies Ltd. (HCLT) and HCL Infosystems Ltd. (HCLI) said.

“The focus is on providing outpatient care, something that can fill in for the disappearing tradition of family physicians,” Nadar said from her office in the outskirts of the nation’s capital. “We aren’t building hospitals. Not yet.”

Nadar is seeking to tap a market for primary care in the second most-populous country where state delivery is poor or inadequate, while private hospitals run by Apollo Hospitals Enterprise Ltd. (APHS) and Fortis Healthcare Ltd. (FORH) are unaffordable to a majority. Health-care spending in India may surge sevenfold to $280 billion in the decade to 2020, a study by the Federation of Indian Chambers of Commerce and Industry shows.

The effort of HCL Avitas, as the venture is known, will be to provide a cheaper alternative for those wanting treatment for the common cold, flu, chest congestion and other conditions, Nadar said. A single appointment at a private hospital in Mumbai might cost $20, compared with $5 at an HCL Avitas facility.

Minor Ailments

Primary health care that can cut costs is especially vital in India, where the World Bank says more than two-thirds of the population lives on less than $2 a day and 86 percent of health-care spending is paid out of pocket by individuals with no insurance.

“Large health-care companies are mostly focusing on multi-specialty, high-end care hospitals,” Sriram Rathi, health-care analyst at Mumbai-based brokerage Anand Rathi Securities Pvt., said by telephone on May 13. “This forces patients into hospitals for even the most minor ailments. Health clinics can address that need gap.”

The venture, being managed by Nadar’s husband Shikhar Malhotra, has a tie-up with Baltimore, U.S.-based Johns Hopkins Medicine International to help train staff and set up processes within the clinics.

‘Deep Pockets’

Her father Shiv Nadar, 68, who had a rural upbringing in southern India, set up Hindustan Computers with partners in 1976 with an investment of about $20,000. He owns 62 percent of software maker HCL Technologies and 50 percent of computer-hardware distributor HCL Infosystems. His net worth is $11.6 billion, according to the Bloomberg Billionaires Index. He has committed more than 10 percent of his wealth to philanthropy.

“Health clinics require someone with deep pockets,” said Charu Sehgal, a Mumbai-based senior director at the local unit of Deloitte Touche Tohmatsu India LLC. “It will have to be a volume game.”

India had 0.7 doctors for every 1,000 citizens in 2012,according to the World Health Organization, while in Ukraine the ratio was 3.5 and 7.2 in Monaco.

Nadar, who is also the chief executive officer of the unlisted holding company HCL Corporation Ltd., plans to use the computer technology expertise of the group firms to connect her clinics, she said.

Key Lever

“Information technology is something we know very well, she said. ‘‘It will be a key lever and will come in handy.’’

Technology can help cut costs in a developing country like India by linking several clinics to a specialist doctor, Deloitte’s Sehgal said.

The outlook for health-care demand in India has fueled a rally in the stocks of health-care providers. Shares of the Chennai-based Apollo Hospitals, with 10,000 beds across 61 hospitals, rose 111 percent since the end of 2010. A 16-member S&P BSE Healthcare index has advanced 58 percent during this period, compared with the 12 percent gain in the broader S&P BSE 500 index.

HCL Technologies shares rose 0.8 percent today in Mumbai to 1,422.35 rupees.

The diseases HCL Avitas seeks to treat are on the rise in the country. India has 65.1 million diabetes patients compared with 50.8 million in 2010 with doctors treating obese children as young as 13 years, according to International Diabetes Federation.

Respiratory ailments abound in the country, which the WHO says is home to 13 of the world’s 20 most polluted cities. Chronic obstructive pulmonary disease is the No. 2 killer in India responsible for about 560,000 deaths and accounting for more than a fifth of such deaths globally, said Sehgal.

‘Here to Stay’

Nadar said her focus on her health-care start-up won’t diminish her interest in retaining the group’s staple computer and software businesses, damping speculation her father plans to sell his stake in HCL Technologies.

HCL Corp. denied a Feb. 21 report in the Wall Street Journal that Shiv Nadar was seeking potential buyers because his only child wasn’t interested.

‘‘As a first generation inheritor, the first mandate is to preserve our family wealth and hopefully increase it,” she said. “I have to take care of it. I’m here to stay.”

Article Credit: Bloomberg

Updated 5 Years ago
 

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