Anurag Tantia, Executive Director, GPT Healthcare Limited

19 Mar 2024 , 10:32 AM

What have been the key achievements and learnings from the company’s journey so far?

In terms of our key achievements and learnings, we have successfully established a strong brand presence in eastern India, a region that is relatively underpenetrated in terms of healthcare facilities. Compared to more developed markets like Karnataka and Tamil Nadu, where there are over 40 beds per 10,000 people, eastern India only has 13 to 14 beds per 10,000 people. 

Despite this, we have managed to establish a brand with 560 beds currently, and our goal is to further expand and develop this brand to cover the entire eastern India market within the next three years, ultimately becoming a 1,000-bed chain with seven hospitals.

Our success lies in our innovative healthcare model, which allows us to establish mid-sized hospitals in densely populated neighbourhoods. By targeting a market within a radius of 4-5 km, we can effectively serve the healthcare needs of the local community without needing to venture beyond these boundaries. 

Are there any strategies or plans in place to expand your operations beyond eastern India to mitigate this risk? How do you envision addressing this geographical concentration concern?

While 70% of our revenues currently originate from West Bengal, it is essential to recognize that India presents a vast and diverse market with ample opportunities for growth. As part of our expansion strategy, we are in the process of establishing two new hospitals. One of these hospitals, located in Raipur, is scheduled to be commissioned within this calendar year. Additionally, we have plans for another hospital, slated for commissioning in FY27.

Looking ahead, we have identified several key cities for further expansion, including Jamshedpur, Varanasi, Patna, and Guwahati. These cities offer significant potential for growth and are part of our broader focus on expanding our presence in eastern India. Our approach is not limited to specific states or cities but rather encompasses a regional concentration within eastern India, allowing us to capitalize on the diverse opportunities available in this dynamic market.

Given the current IPO frenzy, what factors differentiate your IPO and make it appealing to retail investors?

In our historical performance, we have consistently delivered strong returns in terms of both Return on Equity (ROE) and Return on Capital Employed (ROCE). Our shareholder-friendly policies ensure that retail investors also benefit from our success. As we expand into new regions, some of our assets, though highly valued, currently have lower occupancy rates. However, we anticipate an increase in occupancy over the next few years.

Furthermore, our payer mix is among the best in the industry, with 95% of our revenues derived from cash and insurance, and only 5% from government schemes and corporate tie-ups. This diversified revenue stream allows us to maintain a negative working capital cycle and achieve a high cash flow-to-bidder conversion rate of nearly 80%.

Regarding the IPO proceeds, a portion will be allocated towards debt repayment. Will the company be debt free post this repayment?

Currently, our net debt stands at ₹8 Crore, with total debt across the balance sheet at ₹46 Crore and cash investments of ₹38 Crore. With ₹30 Crore earmarked for debt repayment and the remainder to be settled within the next 6 to 12 months, we anticipate becoming debt-free in the near future.

Run us through the key growth strategies of the company.

Over the next few years, we intend to:

• Strengthen our existing hospitals and their offerings and add new capabilities and specialties
• Strategically grow our presence in adjacent markets
• Focus on flexible and asset-light expansion for quick break-even
• Implement initiatives to improve existing operational efficiencies
• Leverage technology to enhance patient and attendant experience through digitalization, and to grow our operation

Please provide us an overview of the ESG strategy of the company.

In terms of ESG (Environment, Social, and Governance) criteria, we adhere to all three benchmarks rigorously. Our commitment to ESG is underscored by various initiatives and practices within our organization.

Firstly, our governance structure is robust, with a strong and independent board comprising five independent directors. These directors bring diverse backgrounds and expertise, some of whom serve on the boards of prominent listed companies. Our audit committee and Nominations and Remuneration Committee (NRC) are both entirely independent, ensuring transparency and accountability. Additionally, our auditors have remained consistent for the past decade, with no resignations or qualifications in their reports. As part of our commitment to transparency, our current auditors will rotate out in the upcoming AGM, with plans to appoint one of the leading firms from the ‘big six’ as our incoming auditors.

In terms of social responsibility, we actively engage in corporate social responsibility (CSR) initiatives. We have programs dedicated to supporting underprivileged patients, particularly those affected by diseases such as thalassemia. Our efforts extend to contributing to society’s well-being.

Regarding environmental stewardship, we prioritize initiatives aimed at preserving and enhancing the environment. This includes planting new trees on our campuses and incorporating solar panels to reduce our carbon footprint.

Overall, our focus on the ESG model has intensified, especially with the involvement of private equity. We have taken proactive measures, including implementing recommendations from audits, to ensure that our ESG policy is robust and aligned with our values and objectives.