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January 07, 2009

ICICI Venture's healthcare SPV plan

Economic Times has an interview with Rajeev Bakshi, joint managing director of ICICI Venture on its SPV, I-Ven Medicare, which is creating a string of hospitals across the country. The firm to integrate the individual hospitals into a single company that can be taken public.
It is a simple, affordable, speciality healthcare model wherein we have bought into a set of entrepreneur doctors who already have established clinics/hospitals in certain locations. We have also bought into an entrepreneur manager who is in the process of putting together a team of professionals to set up a chain of healthcare services across a certain region. We give them growth capital so that the teams of these entrepreneur doctors can leverage their basic competencies to open up more such healthcare clinics in their areas.

We have bought into four such nodes across the country. One each in Karnataka, Maharashtra, West Bengal and Delhi. The aim is to unleash the power of these entrepreneurs from a very basic level. We are bringing these four facilities under an apex organisation. While the four nodes are trying to optimise systems within their own networks, we are trying to optimise across the network. Simply put, we are building an organisation at the centre that will essentially focus on 4-5 things. It will have a small team of up to 8-10 people. As we speak, we already have seven senior professionals.

...In most of the cases, I-Ventures hold the majority stake. We have struck separate deals for these nodes. Each deal depends on the amount of capital we put in. Our stakes go up if we put in more capital. I-Ven Medicare, which is an SPV wholly-owned by the fund, owns these four properties. Later, the shares of these individual doctors will be flipped into the main company. As for exit option, we will go for an IPO at the top or we actually sell the entire top to somebody.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in