Friday, November 22, 2024

Here is why Dr Devi Shetty taking Narayana Health for IPO soon

Monday, August 31, 2015, 22:32
This news item was posted in Business category and has 0 Comments so far.

One afternoon last month, Dr Devi Shetty, who usually speaks to journalists as a philosopher would to an acolyte, sat in his gleaming office in the Narayana Health (NH) campus looking rather uneasy. “According to Sebi rules, my lawyers say I’m not supposed to talk about future plans or financials,” he said, the words not sitting as comfortably on his tongue as cryoprecipitate just had. He sat back self-consciously. “But I can talk about healthcare in general, or maybe not… I don’t know, let’s see.” It’s the most inarticulate anyone might have seen the good doctor. The reason for this unusual reticence is that NH is planning to launch a public issue soon. The multispecialty hospital chain, valued at an estimated Rs 5,000 crore and currently financed by investors CDC and JP Morgan, hopes to raise Rs 1,200-1,500 crore from the market. So, although Shetty had agreed to a conversation at this pivotal moment, it called for a certain guardedness and occasional disclaimers. The IPO his biggest expansion plan yet was like a flashing billboard we were desperately trying not to look at. Dr Shetty was in loose blue scrubs, a surgical mask dangling at his neck. His hands were pink with just-washed germlessness and he exuded the distracted calm of surgeons. He had a bypass in a couple of hours. “Do you mind if I ate lunch while we talked?” Out came a steel lunch carrier from home: rotis, vegetables, curd and mangoes but he kept going for the Mangalorean fish fry. As he ate, he evoked the elusive dream of shedding all administrative responsibilities to simply be a cardiac surgeon. “I had to set up a whole hospital chain to be able to come back to doing the work I love, the way I want to do it,” he said laughing and chewing. “That’s the magic and pain of entrepreneurship.” But an IPO and public listing will add several responsibilities that will inevitably fight for attention with cardiac surgery, his first love. It will also test Shetty’s ability to balance his social agenda — affordable surgeries for the poor — with investors’ expectations of reasonable returns. Why an IPO NH treats more than 2 lakh in-patients and around 15 lakh out-patients annually, most of them from rural and underprivileged backgrounds. This was Shetty’s vision when he established NH, then Narayana Hrudayalaya, in the year 2000 to create a space for accessible, affordable healthcare. Still, many of his anecdotes betrayed a restiveness. Yes, NH was the world’s largest low-cost hospital. “But did you know that India needs 20 lakh heart surgeries a year, but is capable of doing only around 1.2 lakh?” “Mothers ask how much a surgery for their child will cost. I quote an amount. If they don’t have that much, they won’t get the operation. That’s what I do – that’s what all Indian doctors do – every day: put a price on a child’s life,” he said. The IPO will help NH build more hospitals to do more such surgeries cheaper. Shetty’s son and senior vice-president Viren Shetty puts it pithily: “The IPO will enable us to be more us.” But the IPO will also bring the added responsibility of earning reasonable financial returns for shareholders. Being a publicly listed company will open the low-cost hospital to the cycle of quarterly results and shareholder expectations and financial pressures that might compete with Shetty’s social goals. Shetty himself was uncomfortable with it in the past. In a speech in June 2012, he had explained why his family candidly.

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