Hospital Market – India February 2009

Executive Summary SAMPLE Hospital industry accounts for ~x% of healthcare sector revenues Estimated to be worth USD XX bn in 2008 Forecast to reach USD XX bn by 2010 growing at y% annually Market Drivers & Challenges Competition Private sector dominates with x% market share, led by groups like ABC, EFG and XYZ New entrants include domestic firms like AA, BB, CC and DD Foreign entrants exploring the market for partnerships, acquisitions and greenfield projects Future Outlook Favourable policies on FDI and taxations will increase foreign participation Private equity investing significantly; investment set to increase, especially in regional hospitals Large hospital groups making strategic acquisitions but future opportunities may be limited Evolving concept of “health cities”, which have scale and provide a host of satellite services Emergence of telemedicine for rural areas with participation from private sector and government Despite increase in number of beds, supply constraints will remain in top cities Drivers: Poor public healthcare infrastructure Increasing spend on healthcare services Increase in lifestyle-related diseases Medical tourism Nascent but growing medical insurance Challenges: High start-up cost and capital expenditure Shortage of medical professionals

Hospital industry accounts for ~x% of healthcare sector revenues

Estimated to be worth USD XX bn in 2008

Forecast to reach USD XX bn by 2010 growing at y% annually

Private sector dominates with x% market share, led by groups like ABC, EFG and XYZ

New entrants include domestic firms like AA, BB, CC and DD

Foreign entrants exploring the market for partnerships, acquisitions and greenfield projects

Favourable policies on FDI and taxations will increase foreign participation

Private equity investing significantly; investment set to increase, especially in regional hospitals

Large hospital groups making strategic acquisitions but future opportunities may be limited

Evolving concept of “health cities”, which have scale and provide a host of satellite services

Emergence of telemedicine for rural areas with participation from private sector and government

Despite increase in number of beds, supply constraints will remain in top cities

Drivers:

Poor public healthcare infrastructure

Increasing spend on healthcare services

Increase in lifestyle-related diseases

Medical tourism

Nascent but growing medical insurance

Challenges:

High start-up cost and capital expenditure

Shortage of medical professionals

Market Overview Drivers & Challenges Competition Future Outlook

Market Overview

Drivers & Challenges

Competition

Future Outlook

Indian Hospital Industry accounts for half of the healthcare sector's revenues and growth is estimated at y% annually Hospitals are a major component of the Indian Healthcare industry contributing to x% of industry revenues Estimated to be worth USD XX bn in 2008 Growing at y% p.a. Expected to reach USD XX bn by 2010 Fragmented with a large number of independent, privately run hospital and healthcare centres Demand for healthcare far exceeds supply due to dismal performance by the government A huge shortage of beds is a major driver for investment in a growing industry Specialty hospitals in particular are expected to grow faster than overall industry due to rise in heart diseases and cancer SAMPLE Overview Market Size and Growth Source: 2007 X 2008 W Y 2009 Z 2010 a% 2006 V USD bn Hospital y% Pharma z% Diagnostics w% Insurance & Medical Equipment x%

Hospitals are a major component of the Indian Healthcare industry contributing to x% of industry revenues

Estimated to be worth USD XX bn in 2008

Growing at y% p.a.

Expected to reach USD XX bn by 2010

Fragmented with a large number of independent, privately run hospital and healthcare centres

Demand for healthcare far exceeds supply due to dismal performance by the government

A huge shortage of beds is a major driver for investment in a growing industry

Specialty hospitals in particular are expected to grow faster than overall industry due to rise in heart diseases and cancer

Drivers & Challenges Increasing penetration of medical insurance Rapid growth of India as a destination for medical tourism Mounting instances of lifestyle diseases requiring hospitalization Growing demand for quality care and increasing ability to pay Dismal government performance in providing healthcare infrastructure Drivers Shortage of medical professionals High start-up cost and capital expenditure Challenges

Private players dominate the hospital market and with more entrants and investments, this dominance is likely to continue Hospital industry is dominated by the private sector with x% market share Hospital industry in India is extremely fragmented due to the large number of nursing homes and small- to mid-sized hospitals Large private players are leading industry growth New players are also entering the market and competition is limited due to the large untapped potential of the market SAMPLE Competition Source: Private Sector x% Public Sector y% ABC EFG XYZ AA, USA BB, Dubai CC, Singapore DD, USA EE, USA Domestic International New Market Players Public vs. Private sector share

Hospital industry is dominated by the private sector with x% market share

Hospital industry in India is extremely fragmented due to the large number of nursing homes and small- to mid-sized hospitals

Large private players are leading industry growth

New players are also entering the market and competition is limited due to the large untapped potential of the market

ABC

EFG

XYZ

AA, USA

BB, Dubai

CC, Singapore

DD, USA

EE, USA

Hospital industry in India has a bright future and will see significant investments from foreign firms, private equity and domestic players Government policies on FDI and tax are encouraging foreign companies to enter the market ` Future Outlook Private equity firms are investing significantly in hospitals, both large corporate chains and standalone regional hospitals Telemedicine is emerging as a feasible option for public and private sector facilities to provide basic medical care to rural areas Major hospital chains are investing in “health cities”, which have scale and provide a host of satellite services Large hospital chains use acquisitions that offer growth at a lower cost but future opportunities may be limited Despite increase in number of beds with significant contribution by top four private groups, supply constraints will remain in top cities

Government policies on FDI and tax are encouraging foreign companies to enter the market

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