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India’s Newest Billionaire Is Turnaround Specialist-Owner Of Hospital Chain Battling Covid-19

First-generation healthcare entrepreneur Abhay Soi, 48, chairman and managing director of Max Healthcare Institute, which has been at the forefront of Covid-19 treatment, testing and vaccination, is India’s newest billionaire. Shares of Max surged 163% in the past year, propelling the value of Soi’s 23% stake to over $1.1 billion.

New Delhi-headquartered Max, which employs more than 3,000 doctors at 17 healthcare facilities including 14 hospitals across Delhi, Mumbai, Mohali, Bathinda and Dehradun, is India’s second-largest listed hospital chain, after Chennai’s Apollo Hospitals, founded by the billionaire doctor Prathap Reddy.

 “I believe the healthcare sector has entered its golden period and given the near debt-free status and strong cash flows of Max Healthcare, we are particularly well-positioned to take advantage of the same,” says Soi. “I foresee multi-fold growth in years to come.”

A recent report from Mumbai financial services firm HDFC Securities projects a compounded annual Ebitda growth of 29% over the next five years for Max, buoyed by its strong balance sheet and cash flows.

In the latest quarter, Max reported its highest-ever operating margin of 27.2% driven by higher occupancy and an increase in Covid-19 vaccinations. For the full year, it had a 12% drop in gross revenues to Rs. 38,610 million ($528 million).

In August, Max won the exclusive rights from ET Planners Pvt Ltd. to develop a 500-bed, 3.5 acre hospital in Saket in South Delhi, which is located between two large Max hospitals. This paves the way for creating a 23-acre, 2,300-bed contiguous medical hub.

The hospital chain, which also has a home healthcare division and a diagnostics unit, has treated 35,000 Covid-19 patients; conducted 650,000 RT PCR tests and administered 1.5 million vaccines across 15 cities and towns in India.

Soi, who has a bachelor’s degree from the elite St Stephens’ College and an MBA from European University in Belgium, started his career as a restructuring professional with erstwhile consulting firm Arthur Andersen in Mumbai. Munesh Khanna, partner, Backbay Advisors in Mumbai, Soi’s first boss at Andersen says, “Abhay is one of the most focused individuals that I’ve worked with.”

Soi then moved to restructuring teams in EY and KPMG. In 2010, his career took a propitious turn. He was working on the restructuring of BL Kapur Hospital in Delhi when the client expressed the desire to exit. While Soi was looking for a buyer for him he decided to jump in the fray himself. And he bought the hospital’s operating company in an outright purchase after raising funds from JP Morgan.

Leveraging his restructuring expertise, he was able to rebuild the hospital and eventually pay off his debt. In 2014, Soi took control of the struggling Nanavati Hospital in suburban Mumbai, which he again successfully turned around.

Last year, in the throes of the pandemic, Soi cemented a milestone merger between Radiant and Max Healthcare–in a multi-tier deal—with the backing of private equity firm KKR. The newly-created Max Healthcare Institute was listed in August 2020. (KKR holds a 49% stake in the company through Kayak Investments.) The merger was part of the Delhi-based Max Group’s 2018 plan to merge its hospital business with that of Radiant Life Care. Max Healthcare was founded in 2001 by billionaire Analjit Singh, who eventually decided to get out of that business. 

Soi is unfazed by his newly acquired billionaire status, saying that it “provides me the opportunity and freedom to use my resources for betterment of society and contributing to the underprivileged. He’s set up the Soi family foundation with his wife Taruna to focus on healthcare and education for the underprivileged.

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