Bengaluru-based hospital chain Narayana Health, which has announced its plan to foray into the health insurance space, anticipates acquiring the necessary licenses from the Insurance Regulatory and Development Authority of India (IRDAI) either in this calendar year or possibly early next year.
Initially focusing on Bengaluru and Mysuru for 1-3 years, the company aims to address the substantial customer demand in the health insurance sector while emphasising its expertise in creating valuable and customer-centric products, Viren Prasad Shetty, Executive Vice Chairman, Narayana Health, told businessline.
“We have made the application and have also gotten the team together. Now, we are working with IRDAI to get license permission. Hopefully it can happen early this calendar year or maybe early next.”
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The health insurance space not only has an overwhelming customer need but is also marred by huge capital requirements and regulatory hurdles. “While we may not have the ability to generate great revenue and profit from an insurance business for now, however, we know how to create products that will provide value and not create ambiguity for them,” noted Shetty.
Further, the healthcare company reported a 34.3 per cent y-o-y increase in net profit to ₹226 crore in Q2 FY24, with a consolidated revenue surge of 14.3 per cent to ₹1,305 crore. The significant growth in its financial performance is attributed to higher patient volumes across units and growth in business across our units, leading to improvements in realisations in India and Cayman Island.
Despite the seasonally weaker Q3 in the healthcare sector, Narayana Health is confident that its significant investment in technology will enhance throughput and contribute to higher revenues.
Having allocated a CAPEX of over ₹1,136 crore for the current financial year, with 60 per cent already deployed, Narayana Health plans a substantial investment in upgrading and expanding its existing facilities over the next 3–4 years.
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“We have a huge network, and all of them need upgradation and expansion—for instance, some of our hospitals in Jaipur, Ahmedabad, Raipur, and Delhi are all half built,” he added.
Currently, it has a network of 19 hospitals and three heart centers across India, along with a presence in the Cayman Islands, with over 5,821 operational beds and a capacity of over 6,090 beds. Further, it expects to add more than 700 more beds in the next 3–4 years, the company said during its earnings calls.