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Health care is not new ter­ri­tory for Su­nil Mun­jal

For Su­nil Kant Mun­jal, who has joined the race for ac­qui­si­tion of pri­vate hos­pi­tal chain For­tis along with the Bur­mans, health care is not an un­charted ter­ri­tory. Mun­jal has been as­so­ci­ated with a 1,500-bed hos­pi­tal in Lud­hi­ana for over a decade. The Dayanand Med­i­cal Col­lege & Hos­pi­tal (DMCH) is run by a trust and Mun­jal serves as the pres­i­dent of this hos­pi­tal. Besides, he owns a large gen­eral in­sur­ance dis­tri­bu­tion busi­ness that may find some syn­ergy with his health care am­bi­tions.

“I have a per­sonal in­ter­est in health care from the so­cial im­pact an­gle and I have been in­volved in the health care di­rectly and so has been the Bur­man fam­ily in ar­eas such as on­col­ogy. For both of us, this seemed like an eminently in­evitable thing to do,” Mun­jal, chair­man of Hero En­ter­prise, told Busi­ness Stan­dard.

He has said DMCH works with top es­tab­lish­ments and un­der­takes re­search ac­tiv­i­ties. “It has ex­cel­lent health care fa­cil­i­ties,” Mun­jal’s fa­ther Late B M Mun­jal was also as­so­ci­ated with this hos­pi­tal for a long time. Ac­cord­ing to Mun­jal, there is an op­por­tu­nity for some­body who comes from a non­profit back­ground in health care to do some­thing. “The scale is some­thing that we un­der­stand well and we have done that across busi­nesses,” he said.

Mun­jal said his com­pany was the largest dis­trib­u­tor of in­sur­ance poli­cies and it wrote over 10 mil­lion poli­cies last year. “Now, we dis­trib­ute both life and health in­sur­ance. If the in­sur­ance dis­tri­bu­tion busi­ness is com­ple­men­tary with For­tis, we will work to­gether but it will be in a trans­par­ent and arm’s length man­ner,” he said.

Mun­jal said In­dia had a cry­ing need to im­prove the health care sys­tem in both qual­ity and reach. “It is the re­spon­si­bil­ity of the gov­ern­ment but it has not been able to do enough. So, the pri­vate health care sys­tem is sup­ple­ment­ing the re­quire­ments.”

Hero started look­ing at For­tis last year and had ap­proached the com­pany with an ac­qui­si­tion pro­posal. “When I first started look­ing at this last year, the process seemed very com­plex and no due dili­gence was al­lowed. We have taken le­gal ad­vice and we un­der­stand that there is no over­hang of Dai­ichi case on this,” he said.

Ja­panese drug­maker Dai­ichi Sankyo had bought share of pro­mot­ers (Singh brothers) in Ran­baxy for ~95.76 bil­lion 10 years ago. It was found that crit­i­cal in­for­ma­tion with re­gard to United States Food and Drug Ad­min­is­tra­tion (US FDA) probe was con­cealed. While Ran­baxy has been sold to Sun Pharma, Dai­ichi has won an in­ter­na­tional ar­bi­tra­tion worth ~35 bil­lion. Dai­ichi is against any deal that For­tis may ink with a po­ten­tial in­vestor.

When asked whether he and the Bur­mans will re­main a pas­sive in­vestor in For­tis (in case it ac­quires the com­pany) or will ac­tively run the busi­ness, Mun­jal said he would do that con­ver­sa­tion later. “At present, our of­fer is that we want to be­come a big­ger share­holder from be­ing a mi­nor­ity share­holder and in­fuse cap­i­tal in the com­pany,” he said.

The Mun­jals and Bur­mans to­gether hold 3 per cent stake in For­tis and have pro­posed a fund infusion of ~12.5 bil­lion within a month if the board ac­cepts their ac­qui­si­tion pro­posal. For­tis has two more suit­ors — Ma­ni­pal Hos­pi­tal En­ter­prises and Malaysia’s IHH Health­care. Mun­jal said he had deep re­gards for both these com­pa­nies but said that his and Bur­mans’ of­fer would en­sure For­tis gets ~5 bil­lion im­me­di­ately (of ~12.5 bil­lion) to smoothly run the com­pany.

Mun­jal said the pri­vate health care sec­tor had at­tracted crit­i­cism for be­ing profit ori­ented. “We must un­der­stand that the capex is very high in set­ting up a hos­pi­tal due to land, build­ing, and equip­ment. That cost needs to be re­cov­ered. But one can cre­ate an en­vi­ron­ment that is more car­ing and nur­tur­ing.”

He said hos­pi­tals should be mind­ful of what was charged where. “Right now, there is an ac­tive in­ter­ven­tion from the gov­ern­ment to con­trol prices. We must re­duce costs it to the ex­tent that it ben­e­fits cus­tomers but not push it down to an ex­tent that it starts hurt­ing them. We have to be care­ful and keep a bal­ance,” he said.

Mun­jal stepped down from the po­si­tion of joint man­ag­ing di­rec­tor at coun­try’s big­gest two-wheeler maker Hero Mo­toCorp in July 2016. The exit left him with ~35 bil­lion. Besides run­ning his real estate, steel, and BPO busi­ness, Mun­jal has been in­vest­ment­ing in some of the start-ups as well.

Some of his in­vest­ments in­clude, hos­pi­tal­ity firm OYO, on­line lux­ury beauty re­tailer Nykaa, so­cial ven­ture cap­i­tal firm Aav­ishkaar, and Corvi LED light. “We sup­port start-ups and men­tor them. One of the ob­jec­tives is to work with busi­nesses that have a pos­i­tive so­cial fall­out. Jobs will never be enough. And it has to come from ev­ery­where and not just from the large com­pa­nies,” Mun­jal added.

“I HAVE A PER­SONAL IN­TER­EST IN HEALTH CARE FROM THE SO­CIAL IM­PACT AN­GLE AND I HAVE BEEN IN­VOLVED IN THE HEALTH CARE DI­RECTLY AND SO HAS BEEN THE BUR­MAN FAM­ILY IN AR­EAS SUCH AS ON­COL­OGY. FOR BOTH OF US, THIS SEEMED LIKE AN EMINENTLY IN­EVITABLE THING TO DO” SU­NIL KANT MUN­JAL, Chair­man of Hero En­ter­prise

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