The case discusses the growth of Narayana Hrudayalaya (NH) — a social enterprise set up with the objective of providing affordable healthcare to the needy — its emergence as a chain of well-run hospitals across India, and its foray into foreign countries. The case further highlights the decision of the company to go in for an IPO and poses the question whether this would affect the social objective of the organization in view of the pressures it would face as a publicly listed company.
NH was established in Bangalore in the year 2001 by Devi Shetty (Shetty) with a 225-bed hospital primarily providing cardiac care. By 2015, it had grown into a chain of 57 facilities with 5,600 operational beds. NH stood apart in the Indian healthcare market by providing quality healthcare to the masses at an affordable cost. In 2015, it had operational revenue (standalone) of INR 13,075 million with a profit of INR 289 million, treating patients from 25 countries. Shetty had plans to establish facilities with 30,000 beds by 2020. He pioneered several innovations to bring down the cost of treatment and the way in which the treatments were funded.
The challenge for Shetty was to ensure that the avenues and the investors he chose for further funding were in alignment with his priorities, growth plans, and expectation of returns.
In September 2015, Shetty announced his intention to go in for a public issue. There were doubts raised whether the pressure of shareholder expectations would distract Shetty from his social goals.
In 2012, Shetty had stated, “We are eccentric people. We are in the business because we want to help the underprivileged and the cost of healthcare to come down. For that, I need the freedom.” Will Shetty be able to enjoy that freedom and continue with his mission?
|Institution||IBS Hyderabad, IFHE University, India|
|Key Words||Social Entrepreneurship, Health care, Cardiac care, Innovation, Delivery to the masses|
|Courses||Entrepreneurship, Social Entrepreneurship, Healthcare Management, Hospital Administration|
|Target Audience||MBAs, Senior Level Undergrads|
|Permission rights||This case is will be published at the Case Centre shortly. You can download an inspection copy below.|