Vishal Gandhi, Managing Partner and CEO, BIORx Venture Advisors Pvt Ltd, shares his thoughts on the investment scenario for Indian healthcare sector.
In your opinion, what kind of investment trend is Indian healthcare showing?
Healthcare as a sector started attracting private investment only about ten years ago. Before that it was regarded as a charity field wherein no profitable venture could be thought of. But thanks to healthcare enterprise chains like Fortis/Apollo, the scenario has changed. In these past few years, we have witnessed more and more private investment,
merger and acquisitions in the sector. This is a need of the hour considering we are a country where the bed to patient ratio stands at one bed for a thousand patients. In order to change this scenario, Private investment is the only way forward to change this scenario. The healthcare sector has huge potential to attract investment given we are a country of more than 1.2 billion population and 75 percent rural population still has to travel few hundred kms to get decent treatment for even most common diseases.
What criteria an investor looks at in a healthcare company before investing?
First and foremost , a start-up or a company should only approach the angel investors/ VC/PE once they have established a proof of concept from their own equity or money raised from family/friends. The investors look into the robustness of business plan the company has. They also look at the following areas:
b) How scalable the business in terms of entry barriers?
c) How well networked the promoters are
d) How is the management team of the company and also what retention policy the company has for their employees.
What are the steps a healthcare company opts before finalising a VC or PE funding?
Before finalising a VC make sure you have all the elements needed to make your venture attractive in the eyes of the investors. Right from a sound business plan to well planned out revenue model everything has to be in sync with the nature of the business so that the investors do not get a chance to turn down the proposal. Make sure the investors are from the same domain and they have domain expertise that would give value addition along with funding.
What is the role of BIO Rx?
We play the role of risk-mitigators. Because of my professional experience I can suggest ways to companies that they may not even think of. Sitting in a cabin you would assume you are the best, but we as an experienced party who has learnt the tricks of the trade by working for similar companies across the value chain and life cycle of company, BioRx can guide them about ways to avoid risks when choosing investment partners. Because many a times, a company needs a debt and ends up taking a private equity investment. So we can tell them if they should go for a debt or equity depending upon whats the best capital structure
Interviewed by Sharmila Das,
Elets News Network (ENN)