IHH, Hindujas plan to run operations of Mumbai’s Jaslok Hospital

Malaysia’s IHH Healthcare and the Hinduja Group are wooing Mumbai’s iconic Jaslok Hospital & Research Centre as large healthcare chains look at expanding their footprint in Indian cities. IHH, fresh from its acquisition of Fortis Healthcare, and the Hindujas are in talks with the trustees of Jaslok Hospital to run the 348-bed multi-speciality hospital in south Mumbai through an operations and management alliance, ET has learnt.

Jaslok Hospital, which was established in 1973 by businessman and philanthropist Seth Lokoomal Chanrai, is considered one of the oldest tertiary hospitals in the country. Jaslok Hospital did not respond to an email query by ET.

“We do not comment on market speculation,” IHH said in response to an email query by ET. The Hinduja Group did not respond to emails sent by ET. Hospital trusts in India are increasingly looking to hand over management of their facilities to entities that can bring in greater levels of professionalism and global medical practices.

In 2014, KKR-backed Radiant Life Care Pvt took over the management of Mumbai’s Nanavati Hospital in a profit-sharing agreement. Bengalurubased Narayana Health has similar arrangements with Mumbai’s SRCC Children’s Hospital and Dharamshila Narayana Superspeciality Hospital in New Delhi.

Experts said the trend of taking over trusts is peculiar to cities like Mumbai, which are yet to see an influx of corporate-run hospitals. “Unlike Delhi or Chennai, Mumbai has traditionally been dominated by individual trust hospitals.

While there is significant headroom for growth of private corporate healthcare in Mumbai in specific and in western India in general, large hospital chains wanting to inorganically expand their presence here may have to rely on this route of O&M,” said Kaustav Ganguli, a managing director at consulting firm Alvarez & Marsel, leading its healthcare vertical in India and the Middle East.

The Indian healthcare sector has seen consolidation over the past year and financial investment by global chains as the finances of hospitals dwindle.

Rating company ICRA said in a report that the operating profitability margin of large corporate hospital chains in India has declined to 11.4%, the lowest in more than six years, and pricing pressures owing to policy decisions including stent and knee implant price curbs, have eroded their earnings.