Investment

IFC Expands Access to Health Services in India

Rs 3 billion investment through a combination of common and preferred equity

International Finance Corporation (IFC), the private sector arm of the World Bank Group, will invest in Max Healthcare Institute, one of the fastest-growing healthcare providers in India. Over the next four years, IFC's investment will help expand the company's operations. It will also enable enhanced access to high-quality healthcare to a larger number of people. IFC's Rs 3 billion (about $ 67.2 million) investment in Max Healthcare Institute will include Rs 500 million (about $ 11.2 million) of common equity and Rs 2.5 billion (about $ 56 million) of preferred, cumulative, and redeemable equity.

The proposed expansion will add 452 beds to the company's existing 765 bed capacity. It will include adding 268 beds to the Patparganj hospital; a new 100-bed secondary and tertiary hospital in Dehradun; and a new 84-bed tertiary hospital focused on obstetrics, gynaecology, and paediatrics at Saket, Delhi. There will be additional expansions. The project will also create 4,500 jobs in the medical industry during the construction phase.

Guy Ellena, IFC Director for Health and Education, said, "While the Government is focusing its resources on increasing services to rural areas, it is critical for the private sector to complement the public sector by expanding access to meet the demand. With its international standards of patient-centered care, Max Healthcare will provide easily accessible and high-quality healthcare at an affordable price."

Analjit Singh, Chairman, Max India Limited, said, "Max Healthcare is proud to partner with IFC. This partnership recognises our efforts to establish benchmarks of medical excellence and outstanding quality of service. IFC's investment will help us realise our vision of emerging as one of India's leading healthcare providers."

According to the World Health Organisation and the Confederation of Indian Industry, the private sector will account for 75 per cent of all healthcare expenditure after investment by the Government and other agencies. Creating an adequate hospital infrastructure will require $34 billion in private investment by 2012 in secondary and tertiary care hospitals, medical colleges, nursing schools, and hospital management schools. Paolo M Martelli, IFC Director for South Asia, added, "IFC's proposed investment is aligned with our strategy to invest in healthcare, one of India's largest service industries. This project demonstrates IFC's commitment to social sector development. By providing long-term, local currency financing, we are further developing a market for private healthcare facilities."

EH News Bureau