HCL Plan to Invest Rs.1,000 Crore In Healthcare

In its first diversification outside the core business of technology, HCL group today announced its entry intohealthcare. The group plans to invest Rs 1,000 crore over the next five years into the venture, which will operate through a countrywide network of out-patient multi-speciality clinics named HCL Avitas. The arm is also in talks with hospital chains to partner for tertiary care.

Funded through HCL Corporation – which is the holding company of HCL Technologies and HCL Infosystems Ltd, the venture has kick started operations by acquiring two branches of Bharat Family Clinic in the national capital region. Apart from technology, the promoters also have presence in the education sector through Shiv Nadar University and School. However, these are not-for-profit institutions which are operated through the Shiv Nadar Foundation.

HCL Avitas clinics plans to offer value added services such as personalised relationship managers and electronic medical records to its patients. The clinics will also provide related services such as diagnostics, pharmacy, even radiology services in-house. The venture is targeting mainly urban middle class population comprising corporate employees, small and medium enterprises and small businessmen and traders.

HCL Healthcare Vice Chairman Shikhar Malhotra told Business Standard that the concept borrowed from the West and collaboration with the Johns Hopkins Medicine International will help in implementing such concepts in India. “Here a patient, beyond doctor’s care will be handled by a team of specialist, which includes a healthcare coordinator who essentially plays a relationship manager. So this is a unique patient centric approach.” He added though the company will initially focus on expansion of these clinics, in the long run it may also foray into secondary and tertiary care to build its own hospitals.

Of late, healthcare has attracted many corporate groups including BK Modi’s Spice Global, who are looking at this area as a de-risking strategy. According to industry estimates, the domestic healthcare sector is poised to grow to $100 billion by the year 2015 and further to $275.6 billion by 2020. The industry was estimated at $40 billion in 2010.

While HCL founder Chairman Shiv Nadar is on the board of the healthcare company, Nadar’s daughter Roshni who is married to Malhotra will not be involved with the venture. Last November, Nadar had committed an additional Rs 3,000 crore over the next five years to expand the foundation’s education ventures, which are overseen by Roshni. The foundation, set up in 1994, has already invested over Rs 1,800 crore till March 2013.

The company plans to initially expand its healthcare arm in northern India. The venture has so far got 125 people on board, which includes both clinical as well as non-clinical staff. “We intend to provide a continuum of care to our patients, so right now we will actually partner with some of the best hospital networks in India. So there is a referral mechanism going into these hospitals. Discussions are going on around this,” Malhotra said.