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PRIVATE EQUITY | Cesar Tordesillas, India

Private equity funds find India's day care clinics hot investments

India's day care and short-stay surgical centres are receiving private equity-backing this year.

"Better outcomes for patients and better financial outcomes for investors are the two things that are making day care interesting for us," said Avnish Bajaj, managing director at Matrix India.

Short-stay surgical centres are less capital-intensive compared with traditional healthcare.

Day care chains can have lower capital intensity because they don't get into high-end tertiary care and also fewer beds are required because of quicker discharge and faster asset turnaround. "The break-even period in day care centres is much lesser," said Ajay Relan, former Citigroup veteran and promoter of CX Partners.

The private equity arm of Goldman Sachs Group - the fifth-biggest US bank by assets - and venture capital firm New Enterprise Associates recently invested Rs 300 crore in ambulatory or short-stay surgery provider Nova Specialty Surgery, while Singapore sovereign wealth fund GIC acquired a minority stake in Vasan Healthcare, a chain of eye and dental clinics, for $100 million.

Delhi based eye-care chain Centre for Sight is in advanced talks to raise Rs 150 crore from Matrix Partners, Multiples Private Equity and Norwest Venture Partners, according to dealmakers privy to the development.

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