Within a span of six months, as the world was mourning the global recession, two of India?s largest hospital chains, Prathap Reddy promoted Apollo Hospitals and Malvinder and Shivinder Singh promoted Fortis Healthcare have ventured out to Mauritius. They have tied up with strong local partners and established their presence in that country.
Collectively, all these players have committed an investment of $77 million in Mauritius. But the Indian players? investment did not cross $13 million.
The story of the two healthcare majors in this case is inspired by common pull factors of Mauritius, where neither of them wanted to be left out of the high potential medical tourism story unfolding in what is termed as the most investible destination in Africa. Access to population of three continents, Indian diaspora, first mover?s advantage and the government?s cooperation and business friendly environment lured the Indian players to Mauritius, which could eventually serve as a bridge to matured markets of Europe. Both the players feel that the investment in Mauritius could start a trend of acquisitions in future by Indian players abroad. However, expansion in home ground remains the immediate focus. A look at the size of investment and the route of acquisitions tells that the stories of Apollo and Fortis are far from identical.
In January, in its first overseas acquisition, Fortis partnered with diversified industrial group CIEL to acquire hospital Clinique Darne for $7 million. Fortis was a 50% partner with a committed investment of $3.5 million. Apollo had entered into a joint venture last year with British American Investment to set up a hospital with an investment of $70 million with a debt-equity ratio of 1.25:1. Apollo committed 26% investment in the equity part of the JV. The hospital was inagurated in August this year.
Sunitha Reddy, executive director, finance, Apollo Hospitals, told FE, ?With a population of 1.3 million, a floating tourist population of almost 1 million, a per capita income of $12,000, but with an underdeveloped tertiary healthcare service, Mauritius was a very lucrative proposition for us.? Fortis didn?t get similar tax incentives, but the tax benefits accruing from the double tax avoidance agreement that India has in place with Mauritius makes it a preferred country compared to many others from the tax perspective.
?Over 60% of the Mauritians are of Indian origin, so the market is easy to understand. The investment committed by us is relatively low and the valuation we have got is quite attractive. The healthcare market is not very highly developed which gives us the first mover?s advantage. The floating tourist population of around 0.8 million gives a lot of elective surgery opportunity,? said Yogesh Sareen, CFO, Fortis.