After Netmeds, Reliance Now Eyeing Diagnostic Healthcare Segment

Reliance Retail Ventures is reportedly seeking a player with a pan-India presence to bolster its foothold in the diagnostic healthcare segment.

Reliance Retail Ventures, a subsidiary of Mukesh Ambani's Reliance Industries Limited (RIL), is gearing up for a significant move into the diagnostic healthcare sector with the potential acquisition of a majority stake in a pure-play diagnostic services company.

According to a report by HinduBusinessline, the acquisition is expected to be in the range of INR 1000-3000 Cr as the conglomerate seeks to tap into the lucrative $150 billion diagnostic healthcare market.

Paving the Way for Diagnostic Dominance in India

Reliance Retail Ventures is reportedly seeking a player with a pan-India presence to bolster its foothold in the diagnostic healthcare segment.

With its existing online pharmacy venture, Netmeds, which also offers pathology services through collaborations with companies such as Thyrocare and Healthians, Reliance now aims to establish its own diagnostic company equipped with a vast network of physical laboratories across the country.

Sources familiar with the matter have indicated that Reliance Retail Ventures is actively evaluating opportunities in the diagnostic healthcare segment.

While a deal is likely in the medium term, the timeline depends on factors such as due diligence and valuation considerations. The conglomerate is keen on ensuring strategic alignment and seamless integration with its existing portfolio.

Reliance Industries Limited refrained from commenting on its proposed plans when approached for clarification.

However, industry watchers anticipate that the conglomerate's foray into the diagnostic healthcare sector could significantly reshape the competitive landscape and drive innovation in the industry.

The diagnostic healthcare sector, which accounts for less than 10% of the overall healthcare industry, has witnessed consolidation in recent years.

Larger companies have acquired smaller regional and niche players, reflecting a trend toward consolidation and market integration.

Notable acquisitions include Dr Lal Path Labs' acquisition of Suburban Diagnostics at an enterprise value of INR 925-1150 Cr and Pharmeasy's stake acquisition in Thyrocare for INR 4546 Cr, among others.

Despite the competitive intensity in the sector, there is significant growth potential driven by the emphasis on preventive healthcare and increased awareness among the public regarding the importance of regular health checks.

National chains are well-positioned to capitalize on this trend and expand their market presence.

Reliance Industries' Foray into Insurance Sector

Reliance Retail Ventures has witnessed exponential growth through strategic acquisitions in recent years. The company has been actively expanding its portfolio and operations, with revenues exceeding INR 3 Lakh Cr (over $36 billion) in FY24.

While the pace of acquisitions may moderate as the conglomerate focuses on consolidation, it remains committed to making strategic investments to augment its offerings across various sectors, including healthcare services.

In addition to its expansion into the diagnostic healthcare sector, Reliance Industries announced in August last year its plans to enter the insurance sector through Jio Financial Services (JFS).

The company aims to provide digital-first life, general, and health insurance products, leveraging predictive data analytics and strategic partnerships with global players, as stated by RIL chairman Mukesh Ambani.

Ambani highlighted JFS's growth prospects, emphasizing its digital-first approach, robust capitalization, INR 1.2 Lakh Cr net worth, and strong management team led by K V Kamath.

If Reliance’s entry into diagnostic healthcare becomes a reality soon, the company will emerge as a key player in the rapidly evolving healthcare ecosystem with strategic acquisitions and partnerships.