Bajaj Group to Foray into Healthcare Biz with New Hospital Chain

Reportedly, Nirav Bajaj, head of corporate strategy at Mukand, is overseeing the project and is expected to lead the new healthcare entity.

Bajaj Group is set to enter the healthcare sector by establishing a chain of hospitals in metropolitan areas across the country.

This marks the first significant diversification for the 98-year-old business conglomerate since the passing of former patriarch Rahul Bajaj in February 2022.

The new healthcare venture is in its nascent stages and will be managed under a newly formed company.

Reportedly, Nirav Bajaj, head of corporate strategy at Mukand, is overseeing the project and is expected to lead the new healthcare entity.

The investment strategy for this venture is still being finalized, but it is anticipated that the group will invest in phases based on the business milestones achieved.

Bajaj’s Strategic Move

The Bajaj Group, renowned for its key units including Bajaj Holdings and Investments, Bajaj Auto, Bajaj Finserv, Mukand Industries, Bajaj Electricals, and Hercules Hoist, is now expanding into healthcare.

The equity structure of this yet-to-be-named healthcare entity remains undisclosed.

A recent JM Financial report highlighted the sector's high growth potential in metropolitan areas and the increasing corporatization of healthcare, drawing the Bajaj Group to this venture.

Per reports, hospital chains account for 10-23% of beds in Delhi, Hyderabad, Bengaluru, Kolkata, Chennai, and Mumbai, compared with 21-52% at public hospitals and 10-62% at standalone facilities.

"Flush with cash, the group had been exploring entry into a new sector for over two years. A year ago, it engaged one of the top three global consulting firms, assigning them with the task of shortlisting a few sectors for a possible entry," said a source close to the group.

The healthcare initiative marks a significant diversification for the Bajaj Group, which is traditionally active in various industries. The new venture has already established an office in Lower Parel, Mumbai.

Influence of the Growing Sector

India's healthcare sector is on a growth trajectory, with major private hospital chains announcing significant expansion plans for FY24-25, driven by rising demand for services.

The country is largely underserved in terms of healthcare coverage, with only five beds and 8.6 doctors for every 10,000 people, among the lowest ratios globally.

Demographic changes, such as increasing life expectancy and a growing aging population, along with the rise in non-communicable diseases such as cardiac ailments, are expected to drive domestic demand for healthcare services.

This demographic shift presents an opportune moment for the Bajaj Group to enter the healthcare sector.

As the new venture takes shape, it will be interesting to see whether the family office of the Bajaj promoters or the group companies will be the primary investors.

Additionally, the Bajaj Group's family council will play a crucial role in steering this new healthcare initiative.