Swedish multinational Medicover sees India's healthcare market tripling in next 10 years

By Zain Awan
New Delhi [India], March 14 : Sweden-headquartered multinational hospital chain Medicover, which plans to double its India footprint, expects the country's healthcare market size to grow three times in a decade from now.
With a bouquet of 24 hospitals in India, Medicover has indicated that over the next next five years, it intends to double the number.
A specialised provider of diagnostic and healthcare services, the company operates through two divisions - Diagnostic Services and Healthcare Services. In its healthcare network, it has a total of 32 hospitals and 129 medical centres. The group's largest markets are India, Poland, and Romania.
"We believe the healthcare markets in India will triple in size by next 10 years from USD 150 billion to over USD 450 billion. It will grow through multiple sectors. This is a function of the growth of the GDP plus the higher penetration of healthcare spend as a share of wallet... This will drive significant growth over the next 10 years," Fredrik Stenmo, Chairman of the group said in an exclusive interaction with ANI.
According to review of India's Department of Pharmaceuticals,' Foreign Direct Investment (FDI) inflows in the pharmaceutical sector (in both pharmaceuticals and medical devices) in India was Rs 12,097 crore in the financial year 2021-22.
Government data showed FDI inflows maintained its momentum into the current financial year.
During April-September of financial year 2022-23, FDI inflows has been Rs 8,081 crore. Further, the Department of Pharmaceuticals has approved 21 FDI proposals worth Rs. 4,681 crore for brownfield projects during January-November 2022.
Currently, FDI is permitted up to 100 per cent under the automatic route, which essentially means the non-resident investor or Indian company does not require approval from the government for the investment in the hospital sector and in the manufacture of medical devices. In the pharmaceutical sector, FDI is permitted up to 100 per cent in greenfield projects and 74 per cent in brownfield projects under the automatic route.
Meanwhile, Medicover, which has hospitals in Maharastra, Telangana and Andhra Pradesh, said it is likely to enter Karnataka this year.
"Over the next five years, our ambition is to more than double our footprint in India. We will also, as a consequence of that, provide much more affordable care to the Indian people. Of course, our revenues will grow along the way," Stenmo said.
Fredrik Stenmo has been Chairman of the Board since 2017.
India is an important market for the group and notably, it is the third largest Swedish company with 13,000 strong employee size in India, the chairman said.
Currently, the group's total of 24 hospitals are spread across 15 different cities in India.
"We are in 15 different cities. We are of those of four in Tier I or metros. Those are Mumbai, Pune, Hyderabad and Vizag (Visakhapatnam). We are in three states -- Maharastra, Telangana and Andhra Pradesh. We are providing tertiary care -- so predominantly cardiology, orthopaedics, gynaecology and oncology."
According to Stenmo, the group is now expanding to specialties.
"Oncology is the first area where we've done that. We have four centres today. We have gone from being in three states and now entering into Karnataka as well during this year," he said.
The Medicover group provides a broad spectrum of health care services and has a network of hospitals, cancer institutes, speciality care facilities, fertility centers, and diagnostic labs.
Further, on being asked what are the learnings in India so far and how difficult or easy was it while liaisoning with the Indian government, the chairman said, "Within the health care sector, there is a lot of attention and focus from the politicians and the local governments."
"We predominantly deal with the state governments. And because it's such a needed service, we don't have any problems with dealing with the governments, whether it's on the state level or local level developments. They are very accommodating to growth in this sector."
He was also asked how Medicover was different from various other companies which are investing in India.
Without getting into specifics, Stenmo said, "If you're going to be able to bring affordable health care to the Indian people. You need a local cost structure. You need to bring good technology from around the world, but you also need to adapt that to the local level. But the most important element will be to have a long-term view of your ownership."
"Now, we are a family-owned business. Even though we're listed, the family is still a majority shareholder. Our view is generational," Stenmo said.