Narayana Health.pptx

FM-1 Case Study of Naryana Health.

1. Financial Management PROJECT Group 11 Abhinav Jha - DM2520002 Ansh Kachhwal - DM252010 Govind Goel - DM252025 Onkar Agashe - DM252049 Vishnu Priya V - DM252085 Vasudev Misra - DM252082

2. C O N T E N T 01 02 03 04 05 06 07 ABOUT NARAYANA HEALTH Current Facilities in India Economy Healthcare Industry Competitors Timeline Dilemma and Why IPO?

3. About Narayana Health Narayana Health (formerly known as Narayana Hrudyalaya ) is an Indian  for-profit   private   hospital network   headquartered in  Bangalore .  It was founded by  Dr. Devi Shetty  in the year 2000 Narayana Health is known for its innovative approach to healthcare, leveraging technology and process improvement to drive better outcomes for patients.

4. NORTH INDIA CURRENT FACILITIES IN INDIA Shri Mata Vaishno Devi Narayana Super Speciality Hospital , Jammu Narayana Superspeciality Hospital , Gurugram Dharamshila Cancer Hospital and Research Centre   Delhi WEST INDIA Narayana Multispeciality Hospital, Ahmedabad Narayana Multispeciality Hospital, Jaipur SRCC Children's Hospital, Mumbai SOUTH INDIA Mazumdar Shaw Medical Centre , Bangalore MS Ramaiah Narayana Heart Centre , Bangalore Narayana Institute of Cardiac Sciences , Bangalore Narayana Medical Centre, Langford Town , Bangalore Narayana Multispeciality Clinic, Jayanagar , Bangalore EAST INDIA Brahmananda Narayana Multispeciality Hospital , Jamshedpur MMI Narayana Multispeciality Hospital , Raipur Narayana Multispeciality Hospital , Barasat , Kolkata Narayana Multispeciality Hospital , Howrah [19] Narayana Superspeciality Hospital , Guwahati

5. Economy & Healthcare Industry In FY 2014–2015, the Indian economy grew by 7.3% , and it was projected to grow at 7.3% and 7.5% in FY 2015–2016 and FY 2016–2017 As of 2014 data of the World Bank, India was ranked as the 9 th largest economy with a gross domestic product (GDP) of $2 trillion , but in terms of per capita GDP, India was ranked very low, at 127th among 199 countries. In 2014, global crude oil prices fell to $57.33 per barrel , registering a 47% decline in the global market, and they were expected to drop further to $30 per barrel by the end of 2015. Sectors like information technology, healthcare , telecom, infrastructure, and retail were key to the growth of the economy

6. According to the World Health Organization (WHO), India’s total expenditure on healthcare was only 4% of its GDP , compared to developed countries like the United States, which spent 18% of its GDP. In 2013, annual expenditure on health was just $215 per capita. In terms of revenue and employment, healthcare had become one of India’s largest sectors. The Indian healthcare industry was worth $100 billion, and it was expected to grow by a compound annual growth rate of 22.9% to $280 billion by 2020 . The lack of quality healthcare programs in rural India , the growth of the health insurance market, a growing pharmaceutical sector, and an underdeveloped medical devices sector made the Indian healthcare industry a potential investment destination. According to the World Economic Forum and the Harvard School of Public Health, it was estimated that India would incur a loss of $5 trillion between 2012 and 2030 due to noncommunicable diseases . India accounted for 21% of world diseases, had just 1.3 beds per 1,000 people and 0.702 doctors per 1,000 people ; WHO guidelines, 3.5 beds per 1,000 people was the minimum requirement for the healthcare sector . Economy & Healthcare Industry The healthcare system in India was in dire need of investment from domestic as well as foreign private players .

7. Competitors Apollo Hospitals Enterprise Ltd. (AHEL) and Fortis Healthcare Ltd. (FHL) were the top two private sector firms by size in the industry. AHEL reported the highest revenue among industry peers with a total of ₹46,380.70 million. AHEL and FHL were considered to be the main competitors (see Exhibits 2 and 3) of Narayana Health in the healthcare industry, and their enterprise value (EV) was estimated to be ₹203,330.97 million and ₹87,474.27 million, respectively . On March 31, 2015, AHEL and FHL stocks were trading at ₹1,365.45 and ₹164.55 per share, respectively.

8. TIMELINE

9. 2000 - 2005 Establishment & Early Growth Founded in 2000 as a non-profit hospital in Bangalore,  India Established a reputation for providing high-quality, affordable healthcare Expanded rapidly, opening new hospitals across India Consolidation & Expansion Consolidated its position as a leading healthcare provider in India Expanded its network of hospitals and clinics Diversified its service offerings to include specialized healthcare services Continued Growth & IPO Continued to expand its operations across India Established international presence with hospitals in Cayman Islands and Singapore Contemplated an initial public offering (IPO) to raise capital for further growth 2005 - 2010 2010 - 2015

10. The Dilemma Narayana Health is faced with a difficult decision of whether or not to go public. What to do?? Pros Access to capital markets for fundraising and expansion. Increased visibility and credibility in the market. Liquidity for shareholders, including employees and early investors. Cons Increased regulatory and compliance requirements. Loss of control and autonomy for the company's founders and management team. Increased public scrutiny and pressure to meet quarterly earnings expectations.

11. Why IPO?

12. Rapid Growth and Capital Needs Traditional sources of funding , such as bank loans and internal cash flow, were no longer sufficient to support NHL's ambitious expansion plans . NHL's management recognized that access to a larger pool of capital through an IPO would provide the company with the financial flexibility to pursue new growth opportunities Expansionary Ambitions: goal of becoming a pan-India healthcare provider required substantial investments in new hospitals, infrastructure development, and technology upgrades.

13. IPO as a Solution Reduced Reliance on PE investment: While PE firms had played a significant role in NHL's early growth, the company's management recognized the limitations of this funding source and sought greater autonomy and control over its future direction. Market Condition : The IPO market in India was also particularly active in 2015. This strong IPO activity further validated NHL's decision to pursue an IPO, as it demonstrated that investors were receptive to new investment opportunities in the Indian market. Elevated Brand Reputation: Going public would elevate NHL's brand reputation, enhancing its visibility among investors, patients, and healthcare professionals.

14. T H A N K YOU!