Category: Healthcare Investment
Healthcare Investment
2024 India Healthcare and Lifesciences Investment Heatmap
In 2024, the world will be as uncertain, if not more, as it was and anticipating what will happen next is an ever more challenging task for our Algorithms and our teams. Since 2013, our algorithms have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Since the Covid Pandemic in 2020 we lowered levels of prediction accuracy like we started back in 2013. The fake narratives and echo chambers that were peddled during the pandemic years of 2020-22, that vitiated our predictions during the pandemic years continues in for some other factors. 2023 was even more unpredictable in many ways. Our algos do not penetrate the terrorists, government intelligence and security networks and hence unable to consider events that playouts in the Middle East and impacting geopolitics, investments in Indian Healthcare and Life Sciences to some part of the investment flows from offshore. Hence, we have made attempts to analyse International ‘Geo Politics’ as a separate factor and bolt-on-top of our algo predictive models to adjust our heat map for 2024 to accurately predict whether the heat is on in our 2024 Heat Map.
2024: A Year of Geopolitics than Geo Economics
The biggest political event in India in 2024 will be the Lok Sabha General Elections. Hence H1 2024 will not see any major policy or budgetary directions to the sector till the new Government takes over in New Delhi by June 2024 and then presents its budget. For the first time, in the post pandemic era, almost all global funds, analysts and bankers have a unanimous consensus on India’s positive outlook for 2024, some even covering India as a separate chapter in their reports which was dedicated to China in their Asia Outlook till 2022. However, healthcare and life sciences sub sectors in India have its divergence to the overall India outlook for 2024. We have endeavored to bring out the deeper analysis and specifics out of the broad ‘India Positive’ Outlook for 2024 for the Healthcare and Life Sciences Sector in India.
The wave of optimism for 2024 in Indian healthcare and life sciences stems from the following:
- The pace of digitization is now veering toward mainstream adoption of Generative Artificial Intelligence (AI) tools and solutions across that are being piloted.
- New business models/incubation for investments are emerging (see out Future Bets in Healthcare) that will be cross-domain
- The bills and laws introduced in the Parliament in the Session New Healthcare Bills 2023 Archives | Kapil Khandelwal KK are yet to shape bounce in investments.
- Muted returns in the private markets will continue in 2024 as the winter of private investments continues in 2024. Let us understand that the best investments tend to occur during times when investment outlooks appear riskier, so the lower prices in many kinds of equity investments might well yield attractive returns over time.
- Companies listed on the bourses have always underperformed the broader index in the last 2 general elections of 2014 and 2019 by -4.5 to -6.5%. We are expecting the elections results to be neutral this time on the Indian bourses. A few big names to IPO in 2024.
- With one-third of India’s population now constituting Gen Alpha and Gen Z, the health and wellness aspirations of this cohort is the growing aspirational class that wants to live life post Covid-19 differently and different products and services will serve as the next growth opportunity.
- The valuations have come back to realistic levels to the pre-covid levels for primary and secondary investments.
- Debt and equity requirements have stabilised as the cash-crunch situation during the pandemic have ‘normalised’ and so are the return expectations. Both are negatively correlated with yields globally. In other words, investments in equity and its returns will tend to outperform the market, as yields decline.
- As new Generative AI capabilities emerge, the investments in human capital for newer skills are emerging. Also, newer models of ‘sweat’ equity/debt are emerging.
- Investments in newer health and wellness solutions to weather climate change are getting exciting. (see out Future Bets in Healthcare).
- M&A and buyouts are expected to continue, but lower from the peak of 2022.
- How India plays its geopolitics will also determine the quality and quantum of foreign investments in India in the various sub sectors.
The 2024 India Healthcare and Life Sciences Investment Heat Map is as under:
Healthcare Financing
Newer products for financing healthy lifestyle for the Gen Alpha and Gen Z are emerging. Financing ‘idleness’ and healthy entertainment lifestyle through innovative business models are the key. There is a consumer shift for spending on healthy lifestyle which is a personal investment in longevity of healthy life.
- 2024 Outlook: Moderate
- What’s going wrong: slower market/product innovation, right bite for the consumers, reach and penetration to New Gen consumers, financing costs
- What’s going right: India stack digitisation, uberisation, AI solutions
Medical Education
Valuations are correcting and consolidation activity is accelerating. New regulatory regime will come into force and will require investments in managing the delivery and quality of content. New skills for the new AI tools and newer consumer’s requirements needs is accelerating but not in the curriculum.
- Outlook: Moderate
- What’s going wrong: Alignment to new consumers and care, increasing debt burden, new age skills certification, CME with AI-tools
- What’s going right: Skill-mix churn, upgradation of skills, AI for frontline workers
Med Tech Innovation and Life Sciences Discovery and Clinical Development
Capacity creation and new product development continues as India is now into the China+1 club. Expect a few IPOs this year in this sector. Government grant funding will temper down. Geo polities is a key risk to create supply chain disruptions.
- 2024 Outlook: Hot
- What’s going wrong: IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration, PLI policy for sub sector, geo politics, supply chain disruptions
- What’s going right: Human capital, emerging social innovation models, right products selection, market appropriate solution development, peptide based products, chronic diseases product innovation for co morbidities
Pharma and Therapeutic Solutions
Geo politics may affect supply chain and missed topline and profitability estimates. Cost competitiveness like Chinese players to compete globally is the key for growth. Expect a few IPOs, buyouts and exits via secondary sale.
- 2024 Outlook: Moderate
- What’s going wrong: price controls, wrong product portfolio, capacity scale up, global or China-level cost competitiveness, exit of PLI incentives, shortage of skilled workforce
- What’s going right: distribution infrastructure, digital business models, government incentive programs
Healthcare Providers
High levels of leverage is still a concern. Private equity investments slowing down due to valuation expectations. Expect a few IPOs, buyouts and exits via secondary sale. Capacity creation is slowed down due to fund crunch.
- 2024 Outlook: Moderate
- What’s going wrong: margin pressures, price controls, execution of programs on the ground, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch, not exploring newer formats
- What’s going right: asset-lite models, medical tourism
Healthcare Insurance
Loss ratios and profitability is slowing improving as pricing and products are rationalized. Expect two IPOs of two major players. New products innovation for newer consumer’s requirements is lagging.
- 2024 Outlook: Hot
- What’s going wrong: product fit to consumer needs, product approvals, IPOs pricing and valuation
- What’s going right: Consumer demand, reduced loss ratios
Health Retail
The Pharmacy Bill 2023 brings its own set of challenges. AI pilots once mainstream will reduce costs and margin pressure albeit very slowly. The valuation is still a challenge for raising fund and buy-outs, secondary exits. Expect an IPO.
- 2024 Outlook: Hot
- What’s going wrong: regulation, operating margins, spurious social media channels affecting consumer confidence, health UPI, time to scale
- What’s going right: consolidation, newer cross-vertical innovative business models, profitability focus, AI adoption and models
Wellness
2021 was the highest growth year in the last 10 years on the back of discretionary consumer spending on wellness. Digital business model innovation is still lagging. Medical wellness tourism will be recover in Q3 of 2022. M&A activity and consolidation to continue in 2022 but at a slower pace. Corporate Wellness spends to continue to fuel growth in 2022
- 2024 Outlook: Very Hot
- What’s going wrong: regulation, maturity to scale, new mass market business models, repeat sales, spurious social media channels, fake outcome/claims
- What’s going right: newer cross-vertical innovative business models, corporate wellness spending
Alternative Therapies
New Gen consumers are seeking unique experiences and combing with mental health and rejuvenation as their discretionary spends are increasing.
- 2024 Outlook: Very Hot
- What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development, inflated valuation, new mass market business models, repeat sales, spurious social media channels, fake outcome/claims
- What’s going right: discretionary consumer spending, newer cross-vertical innovative business models, mainstream complementary treatment
Moving Forward
As one iconic smart investor said that one should be investing in healthcare and life sciences because you believe smart investing will yield results that are beneficial for society, not just to enrich oneself.
Happy investing and stay strong!
Also Published in Express Pharma February 2024
2024: Healthcare and Life Sciences Investment OutlookWill Ayodhya Be the Mecca of Medical Tourism?
Preamble
Today (22 January 2024) marks the formal opening of the Ram Temple at Ayodhya in Uttar Pradesh. Opinion makers and politicians say that Ayodhya will be the largest religious tourist destination in the world in the non-Abrahamic religious category after Mecca and Vatican with an annual footfall of ~75 mil religious tourists annually. With this positive development, there are also thoughts and plans amongst the healthcare industry folks if Ayodhya can be one of the destinations for medical tourism. I can talk more about Mecca and Saudi Arabia as I was involved in the healthcare industry there in early 2000s and can draw comparisons on Ayodhya.
What is the Tourism Potential for Key Religious/Spiritual Destinations of the World?
The following table will outline and compare Ayodhya with Mecca and Vatican City for starters.
| Vatican City | Mecca | Ayodhya | |
| Annual Tourists | ~ 10 mil | ~ 20 mil | ~ 75 mil |
| Tourism Revenues | ~ USD 0.5 bn (not including revenues from Rome) | ~ USD 12.5 bn (not including revenues from Jeddah) | Yet to start (expected to be ~USD 5.5 bn) |
| Travel Infra | Well connected with Rome | Well connected with Jeddah with a separate Haj Air Terminal to facilitate huge pilgrimage volumes | Yet to develop an international airport. Rail and domestic connectivity being enhanced |
| Medical Infra | Adequate for the local population | Jeddah has over 8500 hospital beds with more being added including a Medical University. Mecca has over 1000 hospital beds | Adequate for the local population. Lucknow is the current Tertiary and Quarternary care location including AIMMS |
| Medical Tourism Revenues | NA | ~ USD 0.9 bn | NA |
India ranks 17th in the world as a tourism destination with a share of ~1.5%. However, its share of GDP is ~6.5%. There is a huge potential for growth for medical tourism if international tourism grows. Ayodhya can provide this growth impetus if planned and implemented astutely. We can learn from the Mecca-Jeddah experience on Medical Tourism on what worked and what mistakes to avoid.
Mecca-Jeddah Medical Tourism – Case Study
At the turn of 2000s, Jeddah and Mecca had a very poor medical infrastructure with limited bed capacity. During the Haj season, millions of pilgrims would land at Jeddah’s Haj terminal. However, the quality of manpower and care was not upto international standards apart from not being cost competitive. Saudi Arabia embarked on the Gulf countries, US JCAHO quality accreditation. Two hospitals in the Eastern Province (Dharan and Al-Khobar) took the lead in JCAHO certification. The Western Provincial government and Riyadh Crown Prince took the initiative in boosting the bed capacity in Jeddah and Mecca which doubled in 5 years. In addition, a Medical University and four private medical colleges were established to increase the supply of doctors and nurses. Special travel privileges and visas were also provided by Saudi Arabia. Prior to the Haj Pilgrimage, specialist doctors were allowed to practice in Jeddah private hospitals as Locums/visiting doctors with accelerated credentialing. As a result, Jeddah’s hospitals earn around USD 1 bn through medical tourism.
Building a Case for Ayodhya Medical Tourism
India’s learnings from other medical tourism destination can be replicated here in Ayodhya. Here are some pointers
Learnings from Delhi-Agra-Jaipur Triangle
The golden triangle as a largest hub for medical tourism developed as these became as a go-to destinations for historical monuments. Delhi and Jaipur were the landing points and also significant healthcare infra which was eventually expanded. Ayodhya as a destination will need to add other co-locations either Lucknow or Delhi to grow the options and choices.
Uttar Pradesh Health Infra Diversity
Our State Health Infra Health Map 2021 States Heat Map | Kapil Khandelwal KK had listed Uttar Pradesh as one of the hottest emerging states for investment in health infra. However, the Uttar Pradesh macro and Ayodhya micro health indicators have improved slightly since, but not radically. It seems that all focus was on planning for tourism and relevant infrastructure but not for healthcare infra. The Jeddah-Mecca case study is an example in the making for coordinated planning and development between the Western Provincial Government and the private Medical and Tourism industry. The nearest JCIA accredited international standard hospital is in 150 kms radius.
Niche Positioning of Ayodhya – Promoting Integrative Medicine
Indian traditional medicine and allopathic care needs to be integrated to provide unique wellness care experience along with the ambience and spirituality of Ayodhya to promote healthcare and tourism.
Geriatric Care is another Axis
Assisted living capacity can be built up for the senior citizens. However, this should not be on a push with real estate development without Golden Hour medical back up. Malaysia has promoted several locations for foreigner under the Malaysia My Second Home around Kuala Lampur along with golf tourism for the Asians expats. Ayodhya My Second Vaas would encourage HNI Indians and expats to explore this avenue.
With the inauguration of the Ram Temple in Ayodhya, the transformation of the destination from a Spiritual Hub to a Medical Tourism Hub can be envisoned. However, we are still far away from being the Mecca of Medical Tourism. We are ranked 10th in the Medical Tourism Index (MTI), 12th in top 20 wellness tourism markets globally, and 5th in wellness tourism markets in APAC.
Jai Sri Ram!
Covid Pandemic is Bust : The Population Pandemic Awaits
Introduction
Recently, the World Health Organisation (WHO) played Beating the Retreat on Covid-19 and proclaimed that the global emergency on Covid is Over. The end tally of the Covid War Losses:
- 765,222,932 confirmed cases;
- 6,921,614 deaths;
- Glaring short comings of healthcare infrastructure;
- Economic and social disruption:
- Nearly half of the world’s 3.3 billion global workforce are at risk of losing their livelihoods, pushing nearly 0.82 billion into extreme poverty
- 25% increase in prevalence of anxiety and depression worldwide, affecting the mental health and well-being of people of all ages.
- Entire food system is affected due to weather changes and disruptions in the supply chains, reducing access to healthy, safe and diverse diets.
While the post Covid war reparations are underway, there was another bugle on the population front. Last year we added the 8th billion human on earth. This is going to be another pandemic in the waiting. The healthcare needs for 8 billion people is a horror war movie in the making. Closer home, India is going to be the most populated country in the world next year.
The Demographics of Population Pandemic
Global Population Pandemic
As a thumb rule, global population growth will stabilize when the birth rate and the death rate are equal. We will continue to grow till the fertility rate ie. the number of children born per woman falls below 2.1. As per various scenarios, the world population, currently around 8 billion, is expected to reach 9.8 billion in 2050 and 11.2 billion in 2100, and then decline gradually.
India’s Population Pandemic
India’s population is expected to peak at 1.65 billion by 2060 and then decline gradually. According to reports woman fertility rate falls below 2.1 by 2030. India’s demographic transition from a high-fertility and high-mortality society to a low-fertility and low-mortality society. (From 2.33 children per woman in 2015 to 2.03 children per woman in 2021, while the life expectancy at birth has increased from 67.7 years in 2015 to 69.4 years in 2021. The population pyramid also shows that the number of children under 15 years old peaked in 2011 and has been declining since then, while the number of elderly above 65 years old has been increasing steadily. Also read: According to a report by The Times of India, India’s population will stabilize only in 2050 (2047 is our Amrit Kaal Amrit Kaal : Budget 2022 | Kapil Khandelwal KK) when the death and birth rate will be balanced. Also we have a higher than usual healthcare acuity due to our genetic make up Tedx Archives | Kapil Khandelwal KK
Managing India Population Pandemic, Its About Quality of Life and Health
For the Covid pandemic, India quickly ramped up the production of Covid Vaccine and also played the vaccine diplomacy. Over billion doses of Covid vaccine was supplied globally to different countries apart from immunising billion Indians. India has built global scale capacity for facing the pandemics. India is also looking to champion the agenda of healthcare for the Global South in its Chairmanship for the G-20 this year. But the issue around the demographics of the population pandemic goes beyond providing for healthcare.
As we plan ahead for the Amrit Kaal 2047 when India’s population growth stabilises, I have been writing and speaking on what is required. Let’s use the Roti, Kapda, Makaan, Dava-Daru (the last one is already addressed in my Tedx Talk Read Healthcare For All | Kapil Khandelwal KK)
- Food security: We have to feed 1.6 billion mouths by 2047 two square mealsx365 days a year. We don’t have enough land mass to be able to produce food at that large quantum. Intensive, industrial scale agriculture would have to be introduced with Green Revolution 2.0. (see PM Task Force Report on Food and Agri Reform Food And Agri Reforms | Kapil Khandelwal KK)
- Water Scarcity: For sustaining life, we had addressed linking of north rivers to south rivers and regenerating the water table
- Sustainable Smart Cities: by 2047 over 60% of the population will be urbanized and would need sustainable and healthy living environment on a very concentrated urban land mass with lower levels of pollution.
- Healthcare for All: We urgently need to invest USD 360 billion to come up to global standards on healthcare metrics. In addition, another USD 675 billion in the healthcare and life sciences value chain to sustain our current and future population and the health acuity today.
Let’s live and let live in a world that can sustain this population pandemic!
Assisted by ChatGPT 😉
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2023 India Healthcare and Lifesciences Investment Outlook
Since 2013 our algos have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Since the Covid Pandemic in 2020 we lowered levels of prediction accuracy like we started back in 2013. Covid-19 pandemic killed over 23 million people globally. 2022 has brought new headwinds, some we haven’t seen in over 40 years. Healthcare spending will fall in 2023 in real terms, given high inflation and slow economic growth, forcing difficult decisions on how to provide care. Digitalisation of the healthcare system will continue, but the use of health data will come under stricter regulation. A New world order under the current geo politics fragmentation and multilateral world is bringing India to the forefront. It’s vaccine diplomacy, effective and cost-effective therapeutic solutions is a game changer for India.
2023: A Year of Newer Normal
Since the Great Chinese famine of 1959, for the first-time life expectancy as per UN, Covid-19 had been cut by 1.7 years off global life expectancy, reducing it to 71.1 years. While a recovery probably began in 2022, the UN calculates that 2023 will be the year when life expectancy first exceeds 2019 levels. The investment thesis with most of the investment managers in the current scenario is more of a long view on healthcare infra which are less tied to economic cycles and an imminent slow down globally. Some of the investment risks the healthcare and lifesciences sector faces include rising real interest rates, increasing price inflation for healthcare products and services in the face of weakening in consumer spending, reshoring the supply chains and the wars, both trade and terriotorial. Digital businesses are equally going to be impacted. ESG and impact funding is waiting for deployment.
Let’s relook at the board trends for 2023 in terms investment activity and trends.
Healthcare Financing
2021 was an all time-high for healthcare financing sector due to emergency and non-discretionary spend on healthcare. Health Tourism related funding is only going to take off in Q3 after the current wave tides down. Consolidation activity to slow down.
2023 Outlook: Moderate
- What’s going wrong: right bite for the consumers, reach and penetration, higher debt financing costs, slower non-discretionary and elective healthcare spend, delaying of healthcare spend and health tourism, new wave restrictions, shortage of digital workforce
- What’s going right: India stack digitisation, agetech, consumer borrowing to spend on electives
Medical Education
Skilled manpower shortages is the key driver for growth. All the students who have returned back from Ukraine need to be accommodate in our current system Regulatory reforms are urgently required to push digitization and newer business models for upskilling existing workforce. Churn in ownership of assets due to consolidation activity will continues at a faster pace.
2023 Outlook: Moderate
- What’s going wrong: regulation, corruption, no vision, skill shortages, alignment to new age care, increasing debt burden
- What’s going right: skill demand, digitisation, manpower-led business models creating their own content or tying up with larger established players, cross-border students coming to India, export of clinical manpower to the West
Med Tech Innovation and Life Sciences Discovery and Clinical Development
India has proven to be the vaccine supplier to the world in 2022 with over forty percent of the world’s pre-qualified vaccine products are made in India. Capacity creation and new product development need to be accelerated particularly in infectious diseases and some niche segments. Reshoring and government policies for that need to be accelerated. Global investment and partnerships is on the rise in 2023. Patent expiry of some of the blockbusters in the US are a huge opportunity.
2023 Outlook: Moderate
- What’s going wrong: Innovation pipeline, IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration, global collaboration and partnerships
- What’s going right: Human capital, cost advantage, reshoring the supply chain, Make in India
Pharma and Therapeutic Solutions
Several players are going to go for the IPOs in 2023. Reshoring the supply chain is moving slowly. The Government production linked incentive is not moving as intended in the medtech, intermediates, APIs. The capital expenditure in creating world-class green infra is still to take off.
2023 Outlook: Hot
- What’s going wrong: price controls, policy log jam, innovation and scale up, cost competitiveness, exit of PLI incentives, scale of capex, Margins pressure, IPO valuation
- What’s going right: cost advantage, distribution infrastructure, Government incentive programs, blockbuster going off patent in the US, ESG funding entry
Healthcare Providers
2022 was a negative year for almost all the listed stocks. With higher interest rates, funding costs for have increased. Inputs such as steel, cement, etc, have also shot up increasing the capex per bed. Newer sources of funding green healthcare infra as a long-term bet which are less tied to economic cycles is emerging. Digitalisation will slow down even further as consumers go back to the old ways. Costs and profitability pressure will increase to maintain the investor interest. PE valuations will continue to get right adjusted to market valuation.
2023 Outlook: Moderate
- What’s going wrong: margin pressures, price controls, execution of programs on the ground, PPP in healthcare, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch
- What’s going right: Asset-lite models, demographics
Healthcare Insurance
The IPOs in 2021 in the sector have created uncertainty in valuation and investor sentiment. The sector will continue to grow as it did in 2022. New products and customer segmentation is going to be the growth drivers
2023 Outlook: Hot
- What’s going wrong: product fit to consumer needs, product approvals, loss ratios, operating cash runway, human capital reduction, consumer offtake and demand, IPOs pricing and valuation
- What’s going right: Consumer demand, digitisation, new products
Health Retail
Spends on healthcare are slowing down and so is the discretionary spend. Falling service levels and consumer trusts is at an all-time high. Costs and margin pressures is going to be more acute. Only one major IPO expected in 2023. Many of the late stage start-up are going to scale down or not raise the capital at the expected valuations.
2023 Outlook: Moderate
- What’s going wrong: regulation, consolidation, slower consumer spending, funding drying up, operating cash runway,
- What’s going right: Consolidation, newer cross-vertical innovative business models, profitability focus and valuation being right adjusted
Wellness
Growth which tapered down in 2022 is still going to be sluggish in 2023 as consumers cut back their spends. Digital business model innovation is still lagging behind. Medical wellness tourism will be recover in Q3 of 2023. Corporate Wellness spends which also scale down even further. PE funding is going to slow down even further as valuations squeeze even downwards with margin pressure. Expect one major IPO here.
2023 Outlook: Hot
- What’s going wrong: regulation, maturity to scale, down round valuations, slowing of wellness spends, manpower and cost pressures
- What’s going right: newer cross-vertical innovative business models,
Alternative Therapies
Growth and new customer acquisition is the new mantra in 2023 as consumer spending decelerates further. New products and therapies that have accessed funding in 2021are going to find it difficult to raise at the expected valuation. Large MNCs are also entering in this space to fight for the consumer’s mindshare. Funding crunch is going affect growth. Expect an IPO. Some of the players may scale down or shut down due to funding. Consolidation activity will increase.
2023 Outlook: Hot
- What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development, growth, funding crunch,
- What’s going right: discretionary consumer spending, newer cross-vertical innovative business models, mainstream complementary treatment.
Let’s wish that we focus on building trust in healthcare for the consumers in 2023 and there is peace across for the world to come out of recessionary trend that would boost the investor confidence across.
Happy investing and stay safe!
Also Listen:
2022: Healthcare and Life Sciences Investment Outlook
Since 2013 our algos have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Since the Covid Pandemic in 2020 we lowered levels of prediction accuracy like we started back in 2013. While we worked on the Heat Map for 2022, we realized that every new wave of Covid is like a black swan event and raises the uncertainty and reduces the accuracy of the predictions with a reset. For 2021, we released two sets of heat maps, one for the healthcare and life sciences sub sectors and another for the States. Since the Central Government took the mantle of immunization, the need for updating state-wise heat map for 2022 is not relevant and not much data is being updated except for the electioneering noise and promises by political parties and immunization achieved.
2022: A Year of Consolidation and Tempering Expectations
2021 was the record year since 2013 when we started tracking the healthcare and lifesciences investments. The investments across the board was the highest, with the maximum number of IPOs and M&A activity, with over USD 2.2 Bn in funding across all the sectors in 2021. Some of the investment activity we predicted for 2022 preponed to 2021 due to positive investor and market sentiments and uncertainty of the future waves of Covid. Therefore, 2022 is a year of consolidation and tempering the tempo of investments.
Let’s relook at the board trends for 2022 in terms investment activity and trends.
Healthcare Financing
2021 was an all time-high for healthcare financing sector. However, recent clamp down of Chinese funded consumer financing fintechs is going to temper down the healthcare financing sector. Health Tourism related funding is only going to take off in Q3. Consolidation activity to slow down.
- 2022 Outlook: Hot
- What’s going wrong: regulation clamp down, right bite for the consumers, reach and penetration, higher debt financing costs, slower non-discretionary and elective healthcare spend, delaying of healthcare spend and health tourism, new wave restrictions, shortage of digital workforce
- What’s going right: India stack digitisation, consumer borrowing to spend on non-electives, immediate gratification, reduced household savings supplemented by borrowings
Medical Education
Key shortages of healthcare frontline workers was very apparent during 2021 Covid Crisis. The need for regulatory regime to upskills is still being reworked. Healthcare could be the key job creator. Regulatory reforms are urgently required to push digitization and newer business models for upskilling existing workforce. Churn in ownership of assets due to consolidation activity will continue albeit at a slower pace.
- 2022 Outlook: Hot
- What’s going wrong: regulation, corruption, no vision, skill shortages, alignment to new age care, increasing debt burden, new age skills certification, funding dry up
- What’s going right: skill demand, digitisation
Med Tech Innovation and Life Sciences Discovery and Clinical Development
India has proven to be the vaccine supplier to the world in 2022. Capacity creation and new product development will continue. Dependence on Chinese supply chain will reduce further as alternatives are developed indigenously. Expect a few IPOs this year in this sector. Government grant funding will temper down.
- 2022 Outlook: Hot
- What’s going wrong: innovation pipeline, IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration, Government grants and funding slow down
- What’s going right: Human capital, cost advantage, emerging social innovation models, lower dependence on Chinese supply chain
Pharma and Therapeutic Solutions
M&A and consolidation activity was at a record high since 2016. Shortage of digital workers will slow down the digital transformation activity. As China substitution and supply chain threats mitigate, the Government will temper down their PLI support as well
- 2022 Outlook: Hot
- What’s going wrong: price controls, policy log jam, wrong product portfolio, innovation and scale up, global or China-level cost competitiveness, exit of PLI incentives, shortage of skilled digital workforce
- What’s going right: cost advantage, distribution infrastructure, digital business models, Government incentive programs
Healthcare Providers
Funding costs will zoom up and will make access to long-term capital dearer. Huge churn in asset ownership and consolidation activity will continue. Digital transformation activity will slow down due to skill shortages
- 2022 Outlook: Moderate
- What’s going wrong: margin pressures, price controls, GST slabs rationalization on inputs, execution of programs on the ground, PPP in healthcare, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch
- What’s going right: Digital business models augmentation, asset-lite models
Healthcare Insurance
The IPOs in 2021 in the sector have created uncertainty in valuation and investor sentiment. The sector will continue to grow as it did in 2021. Digital push and intermediation will be the key to growth.
- 2022 Outlook: Hot
- What’s going wrong: product fit to consumer needs, product approvals, loss ratios, operating cash runway, human capital reduction, consumer offtake and demand, IPOs pricing and valuation
- What’s going right: Consumer demand, digitisation
Health Retail
The major consolidation of the health retail after hectic M&A activity of 2021 will slow down the decibel levels of consumer discounts and offers to focus on generating healthy bottom lines. Only one major IPO expected in 2022.
- 2022 Outlook: Moderate
- What’s going wrong: regulation, consolidation, slower consumer spending, excess funding for GMV and operating cash runway
- What’s going right: Consolidation, newer cross-vertical innovative business models, profitability focus
Wellness
2021 was the highest growth year in the last 10 years on the back of discretionary consumer spending on wellness. Digital business model innovation is still lagging behind. Medical wellness tourism will be recover in Q3 of 2022. M&A activity and consolidation to continue in 2022 but at a slower pace. Corporate Wellness spends to continue to fuel growth in 2022
- 2022 Outlook: Very hot
- What’s going wrong: regulation, maturity to scale, new mass market business models
- What’s going right: newer cross-vertical innovative business models, corporate wellness spending
Alternative Therapies
Newer products and therapies that have accessed funding in 2021 will continue to fuel growth and investments. Adoption of alternative therapies into mainstream allopathic as complementary treatment is going to accelerate. Newer product development and business models is the key to sustained growth and success in 2022
- 2022 Outlook: Hot
- What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development, inflated valuation, over capitalization and cash burn to gain market share
- What’s going right: discretionary consumer spending, newer cross-vertical innovative business models, mainstream complementary treatment.
Let’s wish that there are no further variants and waves in 2022 for any black swarm events for affecting investor sentiments.
Happy investing and stay safe!
Kapil Khandelwal is Managing Partner of Toro Finserve LLP, India’s First Healthcare Infrastructure Fund and Director EquNev Capital Pvt Ltd.
Why India is not selling its Healthcare Assets Under National Monetisation Pipeline (NMP) 2021?
Preamble
On 23 August 2021 the government announced a National Monetisation Pipeline of INR 6 tn, (~2.6% of GDP), aimed at monetising its brownfield infrastructure to fund greenfield ones. Most of these projects will be concentrated in the roads, railways, and power sectors and no monetisation of India’s healthcare assets. NMP provides the guide to funding the National Infrastructure Pipeline (NIP) announced by the Finance Minister on 31 December 2019. I had written an article on the NIP giving my observations and feedback on the NIP with respect to healthcare (see below).
Why is Healthcare Assets Monetisation not Under NMP?
It has been clearly apparent from the Covid 19 pandemic the clear shortages in the bed supply whenever there was a spike in the Covid cases. The private sector just did not have the capacity to manage the situation, burdening the Government and its healthcare resources to step up. I had warned about the gross under supply of beds in my critique to the NIP, “As per one of our investment thesis on healthcare infra in India, to meet the global norms of 3 beds per 1000 population India needs an investment of $200 billion by 2025. This is approximately the total NIP projected across all the infra sectors. The current NIP shows a committed pipeline of $2.5 billion which is only through Center and State Governments. A gap of 99% of what needs to be invested for India to meet global norms for healthcare infra supply! Unlike roads which is hogging over 80% of NIP’s committed investments, healthcare infra is gestational. Therefore, there is a weak and lagging healthcare infra investment in India leading to demand gaps.” These concerns that I had voiced have come out to be true during the Covid pandemic. The issue here is not about how much to invest in healthcare infrastructure but the issue of would the Government want a political turmoil now to sell off its healthcare assets out. More importantly, for the monetization of healthcare assets, there are other regulatory and tax issues for the Government to iron out to be ready for this sector’s assets to be monetized.
I believe that it has been a prudent move by the Government to exclude healthcare out from the NMP.
National Infra Pipeline (NIP) – Where is the Healthcare Infra Connectivity like Roads for the Masses? (Published in Jan 2020 in VC Circle)
Background
Over the last few months of 2019, the Government through various Ministries and industry bodies and Political Forum have tried to reach out to investors in healthcare infra to compile the pipeline of investments that are at various stages of implementation. This report was announced by the Finance Minster on 31 Dec 2019. We congratulate the Ministry of Finance in coming forward with the efforts in reaching out various stakeholders and sets the focus and discussions back on the economy.
While the report recognizes the fact that various mechanisms need to be put into place to debottleneck and fast track the investment process into infrastructure to meet our goals of a $5 trillion Indian economy by 2025 and be the second biggest economy in the world by 2050. It also recognizes the issues relating to land reforms, which the Government dropped out in earlier regime due to political opposition, financing, regulations amongst others. As India’s dedicated healthcare infra fund, we point out some of our observations and feedback on the report with respect to developing and funding healthcare infra in India.
Indian Healthcare Infra Economics
As per one of our investment thesis on healthcare infra in India, to meet the global norms of 3 beds per 1000 population India needs an investment of $200 billion by 2025. This is approximately the total NIP projected across all the infra sectors. The current NIP shows a committed pipeline of $2.5 billion which is only through Center and State Governments. A gap of 99% of what needs to be invested for India to meet global norms for healthcare infra supply! Unlike roads which is hogging over 80% of NIP’s committed investments, healthcare infra is gestational. Therefore, there is a weak and lagging healthcare infra investment in India leading to demand gaps.
While there is a further ripple effect of this investment on the wider economy in terms of job creation, healthy and productive population amongst others which we believe will be the second order issues that can be addressed as investment flows in. The key issue here is what measures the Government and Private Sector needs to take to accelerate the pace of investments and delivery of healthcare infra to the masses like road connectivity.
Key Policies and Measures to Attract and Boost Healthcare Infra Investments from Private Sector
GST Bottlenecks on Input Side with No Pass Thrus on Output Side
Any healthcare infra investments structure whether PPP or private with asset-lite models is taxed under GST. While there is no scope for pass thrus of these costs on the output side. Several representations to the Government on correcting this anomaly have been presented at the highest levels. Unless this is corrected, private sector participation investment is only a minor aggregate to the investments.
Interest Rates YoYo Regime
RBI in its efforts to contain the inflation has not directionally provided a proper guidance of interest rates over the last few years. These changes in interest rates are difficult to model and predict for our investors both Indian and foreign. Healthcare infra investments require a stable interest rates regime.
Bank Leverage for Healthcare Infra
Over the last few years of liquidity crisis with the banking sector, healthcare infra financing like other infra financing has been deprioritized by the banking system as a whole as very high risk. Our discussions with senior leadership with various top banks does not give any confidence that the worst is over for the healthcare infra sector bank financing with many still negative with the burden of NPAs of the past. A policy to establish healthcare infra as a priority sector for bank would be in positive direction.
Pivoting Infra Models for Delivery of Ayushman Bharat
Ayushman Bharat is a positive step in Nation’s healthcare financing and delivery. However, the last report of Niti Aayug states that around 90% of all players in India owning healthcare infra employ less than 10 employees! Seriously, are these really hospitals delivering quality care? Given the current reimbursement rates, private sector participation in the whole scheme can only be marginal or absent in their current healthcare infra operating cost base. A more innovative low-cost infra investment model needs to be developed which some players are working towards to pivot towards the requirements of Ayushman Bharat.
Monetising Existing Gun Powder of Healthcare Infra
There is an approximately $45 billion of healthcare infra assets which are sitting on the books of Central and State Governments and Private and Social Sectors. Many of these require funding for upgrading and expanding their infra. Various archaic regulations and other operations bottlenecks are preventing investments flows into these existing healthcare infra from Indian and foreign investors.
Nine Men Cannot Produce a Baby in a Month (even in a test tube)
While healthcare infra is a highly gestational business, it is dependent on supply of adequate clinical and operational manpower from the investments in the education sector. The NIP duplicates the investments in AIIMs under health and education. A similar push is required in the education sector for private sector participation.
Social Stock Exchange – A Black Swan for Healthcare Social Infra
While working on the regulations for the Social Stock Exchange (SSE) with SEBI. There are several regulations that govern the social sector in terms of ownership of land and infra that need to be streamlined for a healthy investments in social health infra. We estimate that the addressable social ventures that would qualify to be listed on the SSE would potentially deliver an annual turnover to be around $5 bn on a conservative basis from various impact investors. If the regulations are streamlined, our expectations is that this would be increased by a multiple of 3X.
In Conclusion – Our Forward Looking and Safe Harbour Statements
While the NIP is a great exercise for setting the vision and strategy for the way forward. We believe that investor confidence is still muted and the dialogue between the Government and Healthcare Infra Investors and Operators need to be urgently set up for strategizing how the current estimates in NIP for healthcare infra can be boosted 100X to meet the current deficit to Healthcare Infra Connectivity like Roads for the Masses to meet the global norms.
Healthy Financial Relief Package for People’s Health
Background
Last week, India’s Finance Minister announced a slew of financial relief to the stimulate growth and improve the healthcare infrastructure of the country which has been affected badly by the second wave of Covid. The package worth INR 0.62 million crores can be sub divided in three broad themes:
- Those that improve the financial liquidity through a guarantee. The impact will depend on how much money is borrowed through this route. The lower interest rate charged which can be 2-3% less than the normal rate will help to lower the cost of funds. It needs to be seen if such funds are taken for investment or for repaying old loans.
- Provide direct relief for the weaker sections which will benefit the recipients.
- Initiate medium terms reforms that will help farm productivity, exports, power sector and manufacturing.
This blog is about the healthcare sector relief measures announced and my comments and feedback on the announcement
My Analysis for Healthcare Sector Measures Announced
The presentation from the Finance Minister is in the link below. Here are the summary of the measures announced and the comments on the same:
| Announcements engendering additional fiscal cost above the Budget FY22 numbers | Comments/Remarks/Feedback |
| Additional spending on health : Total amount: Rs 23,220 crs (of which Centre’s share is Rs 15,000 crs)The focus is on children and paediatric beds, increase ICU beds, oxygen supply, enhance testing facility among others | Welcome policy measure |
| Additional Food grains (already announced) In the wake of the second wave of COVID- 19 pandemic and to ensure food security to vulnerable, 5 kg food grains to be provided from May – November 2021 | Food security and nutrition to the vulernable section of the society will assist in health and well being and reduce susceptibility to Covid and other infections due to malnutrition |
| Free Tourist Visa for first 5 lakh travelers with a total cost of Rs 100 crs | There could have been a Visa Fee waiver for the tourist visiting India for Medical Tourism |
| Additional outlay for broadband connectivity to each village under BharatNet PPP Model for expansion and upgradation in digit connectivity | This will give a boost to the National Digital Health Mission and private sector digital health enterprises in India |
| The PLI scheme for Large Scale electronics manufacturing has been extended by 1 year till FY26 | There should be an exclusion clause for the innovation based enterprises for health sciences which are developing products and technologies for replacing Chinese/imported products |
| Announcements engendering increase in contingent liabilities/ Announcements engendering increase in contingent liabilities/ capital infusion | Comments/Remarks/Feedback |
| Loan Guarantee Scheme for COVID affected sectors aggregating Rs 1.1 lakh crs (Rs 50,000 crs for Health and Rs 60,000 crs for other sectors) Focus on guarantee cover for “expansion” and “new projects”Maximum loan amount of Rs 100 crs for a duration of 3 yearsInterest cap: 7.95% (For Health); 8.25% (For others)Guarantee cover: 50% (For expansion), 75% (For Others) | This is part of the overall investment required by the healthcare sector to match the global norm of 3 beds per 1000 people. This is in the right direction. The new trend in healthcare infra post Covid is not to build the large hospitals but smaller units. Also where is the manpower to run these new facilities set up under this scheme? |
| Enhancement of the Emergency Credit Line Guarantee Scheme from Rs 3 lakh crs to Rs 4.5 lakh crs | Positive for the healthcare operators who are cashflow strapped |
| Credit guarantee scheme for Micro Finance Institutions aggregating Rs 7,500 crs Guarantee to be provided to scheduled commercial banks for providing loan to MFIs for on-lendingMaximum tenure : 3 yearsInterest rate cap from loans from banks : MCLR + 2%Interest rate on loan from MFIs: 2% below maximum limit prescribed by RBI | Positive for the healthcare MSMEs who are cashflow strapped |
| Financial support for Registered Tourist Guides Guarantee cover : 100%Limits: Rs 10 lakhs for agency and Rs 1 lakh for tourist guide | There could be some investment for skill development for nursing assistants who accompany tourists during their convalesce period while tourism What about the airline sector which is suffering and not been able to provide connectivity as before Covid |
New Streamlined Public Private Partnership (PPP) Policy
Recognizing the current process for approval of Public-Private Partnership (PPP) as long and cumbersome, the centre has announced the formulation of a new policy for appraisal and approval of PPP proposals and monetization of core infrastructure assets. This will help speedy clearance of projects. As I have been writing, PPP in healthcare has not taken off ever since I was on the Planning Commission’s PPP in Healthcare Regulatory Committee. These issues have to be ironed out as Government after Government have tired to draft policies for assisting PPP in healthcare sector, but there is not enough private sector enthusiasm and participation at a large scale to make PPP in healthcare a thumping success. Let’s wait for the fine print of the PPP policy that will come out.
Summary
The Finance Minister has forgotten that there is dire shortage of skilled front line medical workers. With the Covid pandemic, many youths are not forthcoming to join the healthcare sector. Measure could have been announced to make the healthcare sector more attractive for the youth of India to join. It looks like the stock markets have not give a warm response to these measure announced by the Finance Ministry and is running on its own steam.
Disclaimers: We have not used our proprietary algorithms for this blog
Ask What You Can Do for Me, My MP and MLA
Background
India is the world’s leading vaccine producer. However, a lot of discussions in the media by the politicians blaming the Center for the shortage of vaccines has been doing the rounds. One politician even went to the length of sharing the ‘formula’ of the vaccine to other so that they can manufacture the vaccines. A lot of the noise on the increased supply has been creating smoke screens and mirrors to deflect the current mismanagement and blame game between the center and the states for the second wave of Covid. India had set up its vaccine strategy which was
- Phase 1: Healthcare and other front-line workers, while gradually opening it up to the 45 plus age group.
- Phase 2: Vaccination for all persons above the age of 18 years from 1st May 2021 under phase 3 of its vaccination
- From 1st May, under a liberalised & accelerated phase, vaccine manufacturers would supply 50% of their monthly released doses to the govt and would be free to supply the remaining 50% doses to the state govts. And in the open market at a pre-declared price. States are empowered to procure additional vaccine doses directly from the manufacturers. So far, many states have placed their orders directly with the manufacturers and most states have decided to provide free doses to adults. That said, vaccination will continue as before in govt vaccination centers, providing free of cost to health care workers, front line workers and all people above 45 years.
In between, Investeq, a leading financial analyst states in its report Vaccine Supply Modelling for India: Supplies set to improve, Foreign Vaccines to make a big difference Vaccinations: Total spend of $8 billion on Covid vaccines for India in 2021: Investec, Health News, ET HealthWorld (indiatimes.com).
Why is this noise and panic been created? First the politicians, then some equity investment analysts and then even some scientific journals like the Lancet have started voicing this issue of shortages of vaccine all-together. Is this a foreign vaccine lobby playing to put pressure on India to buy their vaccine as India is one of the biggest markets that they cannot ignore as demand saturates in the US? The second issue is why should states or their politicians not fund the vaccine costs for their constituencies?
Indian Vaccination Drive versus The World/China
The chart below shows that India has started out early and is better in its vaccination drive than 90 percentile of the countries of the world.
Let’s understand that India is one of the most inhabited countries of the world. Their nearest neighbour China does not even provide information on their immunization status and yet report near zero Covid cases these days. China has procured for only 13% of its population while India 18% of the population so far.
| Country | Vaccine | Amount (USD Mn) | Dosage | Population Covered (Mn) |
| India | AstraZeneca (Covishield) | 417 | 2 | 209 |
| Covaxin | 80 | 2 | 40 | |
| Sputnik V (Russia) | 3.15 | 2 | 2 | |
| Total | 500 Mn | 250 | ||
| China | Sinopharm | 177 | 2 | 89 |
| Sinovac Biotech | 118 | 2 | 59 | |
| CanSinoBIO | 30 | 1 | 30 | |
| Anhui Zhifei Longcom Biopharmaceut | 18 | 3 | 6 | |
| Total | 343 Mn | 183 |
Asking our MPs and MLAs to Pay for the Vaccination
India has already administered 185 million doses. The current split is 166 million of Covishield and 19 million of Covaxin. There are around 315 million doses that has already been paid for. This would cover around 25% of our population. We will need another INR 75,000 crores to fund the immunization program to reach the Covid herd immunity. Now comes the political issue that some of the States want to deliver the vaccine free of costs to all in their states and do not want to pay or have the adequate budgets. Therefore the issue of political blame game between the Center and the States. If you see the current vaccination drive across the districts, some have a higher rate than others. When we dissect the same information as per Parliamentary there is a surprising revelation. Some of the Parliamentary Constituencies has performed better and are not correlated to the district coverage of the immunized population.
So why not decentralize this process of vaccination to the grassroots to the elected MPs and MLAs for their electorate so that all the politics of vaccine supply is nipped in the bid. We have 543 MPs and 4215 MLAs in India. An MP gets INR 5 crores while the MLA get INR 2 crores per annum to be spent on their in their constituency for the local development. This comes to INR 2715 crores per year from Lok Sabha MPs and INR 8430 crores per annum by the State MLAs. Over 5 years this amounts to INR 55725 crores. History shows that hardly 25% of this money is spent. As Covid is a black swarm event for the country, the next 5 years of the MP and MLAs Local Area Development Spend is advanced right now so that they can procure the vaccines for their constituency electorate and get them vaccinated as per the vaccination strategy announced. This will also ensure that the blame game between the parties and the Center and State is put to rest and the elected representative are put to work to deliver the results of the vaccination to their electorates.
Health Economics of Tomato!
Background
Finally one of the unicorns in the foodtech space has turned profitable. Zomato is going public with its IPO. With public money it will raise, will also come the public scrutiny of what it does to the public and society at large. Here are some of the data from the Zomato prospectus that summarizes the scale of its business model and its impact on Indian society.
- Total reach of Zomato is in 526 cities
- It has around 350,000 restaurants listed
- Around 41.5 million people visit its app or website in a month of which around 11 million people place orders
- It make around 400 million food deliveries in a year (averaging around 3 deliveries a month per user who places orders on Zomato)
- Zomato earns around INR 90 per order of food. Their gross order value in 2020 was around INR 230 (increased substantially during lockdown)
- Around 160,000 delivery partners are employed in the 526 cities averaging around 300 delivery partners for 3 shifts on 24/7 operations
- Industry experts say that the delivery partners drive around 6 kms (during lockdown it was 7.5 kms) from their point to restaurant and the user delivery location to meet the time commitments of 30 minutes. The radius for the restaurant to the user comes to around 5 kms (during lockdown it was 6 kms)
I am assuming the metrics for Swiggy would be around the same metrics as Zomato. Both the Food Delivery Apps must be providing tremendous time and place value to its loyal consumers but at what economics. Let me debunk this now.
Economics of Food Delivery Apps in India
Assuming 800 million food deliveries with an average radius of 5 kms, the total distance traversed would be around 4 billion kms in a year. This is equivalent to travelling between earth and Neptune. That’s a long distance in terms of the food delivery only! The cost incurred for each food delivery was INR 50 per trip. The total cost incurred and cross subsidized by the Food Delivery Apps amounts to INR 4000 crores in 2020. This costs 10 Mars Missions from India in a year!
Now let’s turn to the carbon emission of the 2-wheelers used by the delivery partners. Assuming 4 billion kms travel would require around 80 million litres of petrol for the bikes in a year. They would release around 186.16 million Kgs of carbon in the environment assuming all the bikes are 4-stroke engines. That’s not a great environmental impact! I am not assuming the impact of plastics and other packaging material used by the restaurant partners and dumped into our cities dumps every year as this is not the responsibility of the food delivery apps but the consumer and the restaurant partners as a choice.
On an average INR 230 per order would provide around 1000 calories worth of food assuming all is healthy food ordered. The impact that the consumer feels by getting time and place value is hugely negative. So far these companies doing food delivery were not in public scrutiny but the reality is very negative. Are we creating Tomatos out of the Zomato’s consumers?
Not healthy for the Food Delivery Apps Companies, their investors or their consumers.
Health Economics of Tomato!
Now lets focus on the health of the tomatos who order food. I am assuming that they are busy enough not to be able to cook or step out to the restaurants and are intelligent enough to be aware of their health risks and well being and are only ordering bunk food (anti thesis of junk food) as nobody likes to eat healthy food which is not so delicious to the taste buds. At INR 230 per average order they are consuming around 1000 calories of food. As per ICMR the recommended daily calorie intake is 2100 Kcal for urbanintes. So the average order on food delivery apps is equivalent to a single meal which is around 800 kcal .
Let’s turn to the fitness. WHO recommends that a fit person should walk 10000 steps a day. This is around 8 kms a day. The 80 million consumers of the food delivery apps (Zomato and Swiggy divided equally) would be walking around 230 billion kms in a year. This is 60 times more than what the food delivery partner of these apps travel in a year. So, the question is, what is the health risk of those who order food on these apps really walking their quota of daily distance and prefer instead the meal right on their doorsteps?
Based on the penetration of cities of food delivery and the health risks penetration, the Tomatos are equally penetrated in states where the health risks are fairly high and shows a very strong correlation to food to be served at their doorsteps.
The remedial health issues and what the public subscribing to the IPO of Zomato should be inquiring into is a subject matter of another blog which may come some other time post IPO.
Disclaimers: I do not have Zomato and Swiggy Apps installed on my mobile phone and do not order any food from the food delivery apps. I am not an interested party in pooping the party of Zomato’s IPO.