January 11, 2017

Vaatsalya

From a start-up to one of India’s top chains of affordable general hospitals.

Investment highlights

Vaatsalya is one of India’s largest general hospital chains, providing affordable care in the district capitals of Karnataka state, such as Mysore. Vaatsalya offers 50-75 bed hospitals that can handle most standard general medical and surgical procedures (e.g. caesareans, appendix removal), so avoiding the need for patients to travel to the state capital Bangalore.

  • 2009: Bamboo invested $4.15m for a 28% stake in a start-up operation
  • 2010-12: fast expansion to a chain of 18 hospitals across Karnataka
  • 2013-current: further investment of $0.6 million, refocused the business to concentrate on improving profitability at just 8 facilities with plans for a trade sale

Bamboo focus and added value

After the initial burst of expansion, Bamboo worked with other shareholders to concentrate on improving profitability and creating a business ready for an exit.

Implemented better control procedures to prevent leakage of revenue, including a new internal audit firm; improved cost-effective marketing to local GPs; and focused on customer satisfaction:

The number of patients saying they would enthusiastically recommend Vaatsalya to friends and family rose from 90% to 98%.

Closed 10 hospitals that were not clearly viable; rebuilt the management team, with a new CEO and CFO; brought in expertise from another affordable Indian provider; instrumental in obtaining new funding for the business in 2014.

Overall business expected to be Ebitda positive in 2018 and preparing for a trade sale.