QuoteUnQuote with KK and Dr. Deepak Kumar Saini, Convener, Longevity India and Professor, Dept. of Developmental Biology & Genetics Indian Institute of Science (IISC), discuss Bet #3 on anti-ageing tech and products that is going to be a major trend in the next 5 years. Why is it so?
As 50s is the new 30s now. Present Genx and seniors would like to reverse age or age slowly. By 2047, over 300 million Indian would be Senior Citizens and our dependency ratio will be around 40%. Indian would like to extend their lifespan 20% to 50%. But the trick here is to ensure that the end of life after prolonged life is a quick process rather than a prolonged decline.
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
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
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
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.
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.
How we reached 8 Billion People on Earth?
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!
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.
2023 India Healthcare and Lifesciences Investment Outlook
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
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.
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,
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.
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.
2022 India Healthcare and Life Sciences Investment Heat Map
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
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
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
Our Supreme Court has directed the Central and state governments to consider imposing a ban on mass gatherings and super spreader events. “We would seriously urge the Central and State governments to consider imposing a ban on mass gatherings and super spreader events. They may also consider imposing a lockdown to curb the virus in the second wave in the interest of public welfare,” the SC said.
Let us understand that the national lockdown in the first Chinese Wuhan Virus Wave was to create the requisite infrastructure and capacity to ensure that the country does not go into a crisis and the 7-day moving average (7DMA) of infection does not increase the stipulated doubling rate of 1 day. Moreover, the cost of lockdown to the economy for a single day of lockdown is around USD 6.0 billion (INR 45,000 crores approx).
In the second wave, the issues are different. We have our 7DMA of infections is much lower and the doubling rate is much higher. Moreover, as the immunization drive picks up, we will see the two parameters of 7DMA and doubling rate become even more manageable.
So the issue in front of us is, should we impose a complete lockdown and for how long taking cognizance of the Supreme Court directives.
How Far Are We From the Peak in this Second Wave?
In order to arrive at a predictable view of how long should India and its states go into a lockdown and even out the daily economic losses to the country, there are several parameters which we need to consider:
Second Covid Wave in 12 countries before India
Second Covid Wave Peaks in Different States and Cities in India
Covid Immunisation strategy
Second Covid Wave in 12 Countries before India
we can learn from the other countries which have gone through the second wave before India. Based on the learnings from these countries, our Central and State Governments can work out a formula to impose lockdowns and unlockdowns without hurting the economic activity in the country. The table below gives out the duration of the second wave (in days) and % of population that was infected during the Second Wave:
While it is pretty apparent that each country reacted to the second wave differently. The chart below shows how effectively did each of the 12 countries manage the second wave.
Spread of the Second Wave of Chinese Wuhan Virus
Mexico, Turkey, Israel has the second wave duration of less than 100-days, while Germany and Canada had a duration of over 200 days. The peak of the Second Wave was around 120 days (ie 4 months) as an average). The average population that was infected in these 12 countries was around 2.5%.
Analysis of Second Wave of Chinese Wuhan Virus Infections in the 12-Countries
This is valuable information and analysis for us to predict where India is in the second wave.
Second Covid Wave Peaks in Different States and Cities in India
Maharashtra including Mumbai was the first state to begin with the Second Wave in India. It has already seen the peak and is around the global average of around mid-point of the 120 days wave (ie. 60 days). We will see India as a country peaking by mid-June 2021, unless we solve all the infrastructure and logistical nightmares which some cities like Delhi is undergoing.
Analysis by IIT Kanpur Prof Manindra Agrawal
The other silverlining is that many other Indian cities are already in their peaks. An interesting analysis by IIT Kanpur Prof Manindra Agrawal shows.
Covid Immunisation Strategy
As I have already written, our Covid immunisation strategy needs to be reworked. It’s not the political compulsions and broad headlines. We need to immunize over 15% of our population by Mid-May 2021 which we have not yet achieved and most likely going to miss the target for the total duration of the second wave and the imposition of nation wide lockdown durations to recede.
Therefore, the opportunity costs for the country in reducing the duration of the lockdown in the second wave is huge provided we implement our covid vaccine immunization strategy and coverage astutely. Invest, invest, invest in immunizations and make it free for all as an incentive. The rest the statistics at the end to the lockdown will reveal.
No Courts in the World Bear the Economic Outcomes of the Country based on their Judgement!
Earlier in the last decade I was part of the Healthcare Committee of Bombay First which was assisting the Maharashtra Government in the Mumbai Masterplan 2045. One of the key concerns and recommendations made by the Committee was building the healthcare infrastructure for the city, Mumbai lags behind in beds per 1000 population with several key peer Indian cities such as Gurgaon, Delhi, Chennai, Hyderabad and Bangalore. Alongside the shortfalls in hospital beds, there is also a shortage of healthcare professionals, equipment and infrastructure needed at various levels in the healthcare delivery supply chain. The second wave of Covid in the city has once again proved that the healthcare delivery to the Mumbai residents is again in short supply, be it beds, healthcare workers or vaccines. With the crisis looming large, the city is on the brink of a long second lockdown. Without delving into the politics and finger pointing, I want to point out the gaps.
The Gaps in Healthcare Delivery and Covid Response in the City
Hospital Beds Shortage in Skewed Distribution Geographically
In Early 2000s, Mumbai has around as per the Bombay First report, 24,984 beds. As per the recent Mumbai Municipality report, there are 24,039 beds in 2021 in Mumbai. In other words, hospital beds have actually reduced over the last 20 years in Mumbai. It is obvious that many nursing homes have shut down as the doctor/owner have found it lucrative to monetise their nursing homes to commercial real estate. As a result, Mumbai is amongst the worst cities in India with a bed to population ratio of 1.17 beds per 1000 (as against the WHO norm of 3 beds 1000). It was 1.63 beds per 1000 in 2000. Moreover, these beds have been unevenly distributed in Mumbai. South Mumbai has around three-fourths of the total beds in the city which was the case in 2000. This means as the city expands to the suburbs, no additional bed capacity has been augmented in the last 20 years in Mumbai.
Map highlighting the Geographical Coverage of Prominent Hospitals in Mumbai
Second Covid Wave in Mumbai and Skew in Spread
As per the recent Mumbai Municipality Report on Covid, the highest increase of positive Covid Cases in the Western and Central Suburbs of the City in the last 7 days. (See the chart below). While the alarming rate of growth of covid positive cases in these wards would take less than 28 days to double the cases. As compared to 35 days as an average for Mumbai city. While the response to Covid is in the Western and Central Suburbs, the concentration of healthcare facilities is predominantly in South Mumbai. While this is leading to a lot to movement of people seeking admissions to hospitals for Covid treatment.
Spread of Covid Positive Cases in Second Wave till 8 April 2021
Action Plan for the Future
The cost of real estate in Mumbai very prohibitive for private healthcare operators to set up greenfield hospitals unless there are regulations to incentivise them. Various recommendations provided by our Committee is not been implemented on the ground. The Covid Pandemic is a wake up call for the City administrators to buckle up and bit the bullet to accelerate healthcare infrastructure in the city by our planners for the future.
I started 2020 with a very positive outlook. Our investment heatmaps were indicating upswing in investment activity, term sheets in progress for investments, strong investment flows on the back of Sino-US trade blockade. By 15 March, it was clear that some Chinese bug has hit Indian shores and I started out moving back our teams to their home bases, talking to the authorities on the situation. On my birthday, just a day before the first 14-hour lockdown, I was working late in office to mitigate the risk that may be arising out of the business disruption. Then there was the forced lockdown preventing me to work from office. The start of the Financial Year 2020-21 was clearing going to be a devastating one for all due to the Covid pandemic. In the first week of April 2020, all the financial and business outlook turned negative and also I suffered huge financial losses never anticipated in my life as a result. It was a very depressing personal situation for me which I had never faced in my life. It was clear I needed to bouceback. Suffering losses is a temporary situation, letting the frame of mind to continue with being mentally ‘broke’ was just not acceptable to me. Clearly there were four key issues that I observed in Q1
the volatility and pace at which the situations changed
all plans and predictions went for a toss
there was utter chaos and no one had a clear head and view to handle the complexity and solutions to solve it
with more bad news, there was no view when things will bottom out
That’s when I started my journey of My Song, My Life, My Mantra, My Way, My Avatar.
2020: My Song
During my long walks during the first week April, I would listen to Bon Jovi’s hit Estranged, the lyrics of which went like this and my responses (in brackets)…
When you’re talkin’ to yourself (about your situation)
And nobody’s home (although at home with family in the lockdown)
You can fool yourself (that All is Well)
You came in this world alone (I am all alone fending for myself)
So nobody ever told you baby (nobody had a clue)
How it was gonna be (the lockdown and beyond)
So what’ll happen to you baby (rather be strong than helpless)
Guess we’ll have to wait and see (no way)
One, two
The nine minutes song played out the remaining nine months of 2020 of my life.
2020: My Life, My Nine Mantra
There 9 minutes of the song inspired me to write my nine mantras to bounced back and come out a winner in 2020. These were:
1. Love Thy Self: No Self Empathy
Every one in my circle of networks was very scared and required empathy. How would you empathise if you are yourself shallow and lack self-love? The toxic energy in the environment that was flowing around just was not doing good to me. I need not be a victim of this toxicity. That’s when I decided to manifest myself with a new energy and to fight the situation, I need to be stronger physically, mentally, spiritually. I started out with a healthy diet and high-end nutraceuticals, doubled up on my daily walks, increased my heart points by 3 times and started drawing on positive energy. As a result, I was over 10 kgs down in weight, much fitter and well energized positively to empathise with the people
My mission in life has always been how to make healthcare cheaper, better, faster. Healthcare for All | Kapil Khandelwal (KK). With my interactions and calls with our investors, there was confidence in what we were doing. In fact, we raised even more funds during May-June 2020 for healthcare investments. The critical issue at hand was what investment strategies worked in the past would work in the post-Covid era. It was time to rework and restrategise the vision for my future avatar. With the positive energies, I set fearlessly out my renewed vision with Josh, Jonoon and Jigar. My best is yet to come!
3. Focus, Focus, Focus
With the my Avatar 2.0, it was time to focus. I clearly had 24-hours in a day and many unfinished business and agendas. It was with the renewed focus, that I cut down that was not required through a VED analysis of my work load. Clearly three key agendas for focus emerged out of this which I set forth in my work, declining, regretting and pre-closing many ongoing commitments as a result. This helped me put my time to get the maximum impact and the outcomes that my new Avatar was to emerge out.
4. Build the Safety Net and Resilience
My primary responsibilities during the lockdown was to ensure that my people and their families are not adversely affected. To build confidence in my people, I build a safety net and emergency response for any eventuality due to Covid. At the cost of selling off my personal investments at a loss, I ensured that my people had food on their table and committed to my renewed vision with confidence.
5. Create Impactful Behavior and Environment
To rebuild the economy and our healthcare systems for the future, it was clear that capital and investments would be with empathy and impact along with positive investor returns. One of the unfinished business was to ensure that there was a holistic and inclusive regulatory framework for the Social Stock Exchange (SSE) in India. I had been part of the journey with SEBI from its inception and worked with our team to produce a white paper with several recommendations which is now being on the table for the final regulation.
Other than the usual networking activity virtually during lockdown, being an investor allows you access to world politicians, thought leaders, think tanks, industry bodies, academia and opinion makers across the diaspora. My time was well spent speaking with them and gathering their take on various issues emerging out of this world crisis. Over the last 9 months, I had 1×1 with over 200 folks. I really thank them for taking their time to talk to me.
7. Guides and Mentors
I renergised my circle of guides and mentors and opened up communications where we discussed may of my fears and issues heart to heart. This provided me the inspiration for being a better leader for the emerging new world order.
8. Inspirational Leadership
With the current crisis, the model of leadership that I demonstrated is lead from the front and demonstrating everything is possible with less to do more. The constraints-based parochial leadership was passe for my people whether they were in front of me or virtually.
9. Communication and Feedback with the World
In order to guide my peers and folks in the industry, I launched a podcast series QuoteUnQuote With KK which quickly emerged as India’s leading business podcast globally. QuoteUnquote with KK | Kapil Khandelwal (KK). This platform allowed me a means to communicate to the wider diaspora and also gain feedback from the world on what they were thinking on the issues.
2020: My Way, My Avatar
When I look back what I started alone in 2010 leaving Cisco as the top-200 Executive and compare what I have emerged out of 2020, I see that my way for the last 10 years could have only taken me so far. 2020 pandemic and situation, forced me to estrange my previous avatar and reincarnate into a new avatar that will be strong and durable for the 2020s decade.
The strong motive and motivations for my new avatar will drive me forward in the new normal for the world. I thank all those who have been part of this journey in 2020 to make it possible for me.
India has finally developed a vaccine for Covid which was approved by the regulatory authority the DCGI and it now the front runner for production of vaccines in the world. This is a great moment for India’s scientific might and I want to congratulate all the scientists who have worked tirelessly to deliver this solution to fight Covid to the world. Let me tell you that having worked in the drug development industry and also on the boards of several pharma companies, and biotech industry policy making, all efforts of the scientists are guided towards drug safety and efficacy before the final vaccine candidate is commercially produced for the masses. In the last 24 hours, leaders of several political parties have placed their roles in shamming and shaming the Indian scientists on the Covid vaccines being approved by the regulators in India. Let me inform you that Indian scientists do not work for political parties, they work for the advancement of science and technology. In this blog, I want to debunk some of the politics going on around our Covid vaccine and the timing of their political statements
The Political History of Bharat Biotech
Bharat Biotech whose vaccine Covaxin started in 1996 in the Genome Valley in Hyderabad. At that time the Deve Gowda Government with the support of Congress was at the center and the Telgu Dessam Party (TDP) was ruling in Andhra Pradesh. Let me remind the leaders of Congress who have come out with some statements, why did your Minister heading the Department of Science and Technology under which Department of Biotechnology (DBT) comes in provide grants to such a company if you believed that today that company is a fraudulently and premature in producing a vaccine for Covid. Over the years under the Congress rule, Bharat Biotech received some many grants and awards from the DBT to further their development of various vaccines. Infact BIRAC an arm of DBT also owned equity in Bharat Biotech at some point in time for the funding that was provided to Bharat Biotech by the Congress Government. I had been associated with the DBT and the Principal Secretary, DBT during the Congress Government who I worked closely to deliver the Biotech Ignition Grant Policy to the nation. He was very appreciative of the work Bharat Biotech had done and achieved several milestones in its journey with several vaccines and patents.
The Science into Politics – Way Forward
Rather than making baseless statements around the vaccines being approved, its time political parties appoint a Chief Scientific Advisor like they had Chief Economic Advisors in their party. The job of this Chief Scientific Advisor and his team would be to sieve through the clinical data presented to the regulators DBT, DCGI and other departments and raise scientific issues and challenge the science on the floor of both the houses of the Indian Parliament through their elected party representatives rather than make frivolous public and press statements outside the house. This would imbibe science into politics and allow for the ruling political party of the day to address any issues relating to the science of drug development through the right governance mechanisms of our Parliamentary Democracy. All I must say here is: Dear Politicians, please do not debunk our Scientific progress for your political gains and headline statements for your parties and your social media impressions and eyeball. In the eyes of science, you all have been marginalized completely.
