US firm Bayada buys 26% stake in Chennai's India Home Health Care

BANGALORE: A US company has bought a 26% stake in Chennai’s India Home Health Care, betting that a burgeoning middle class will lead to significant demand for home healthcare in India. This is the first investment outside the United States for privately held Bayada, which expects to earn $1 billion (over Rs 6,300 crore) in revenue next year.

“We see the Indian economy advancing and the growing need for compassionate, excellent, and reliable home healthcare,” said Mark Baiada, the company’s founder-president, who refused to divulge the financial details of the deal.

Bayada had earlier scouted for locations in Hyderabad to set up an office there. “It unfortunately was not successful and we contacted IHHC to see if we could work with them to develop professional home healthcare services in India.”

The New Jersey-based company, with operation in more than 25 states in the US, plans to buy out IHHC in the next few years. V Thiyagarajan, founder and managing director of IHHC, said the company chose Bayada over other financial investors for its knowledge about the sector.

“They understand the space (home healthcare) intimately,” said Thiyagarajan, also the founder of enterprise application developer Sybrant Technologies. “They will help us reach the next level of growth faster.”
Industry estimates peg the Indian home healthcare market at $2 billion (over Rs 12,600 crore). The global home healthcare market is expected to cross $300 billion (about Rs 19 lakh crore) by 2018, according to a report by Transparency Market Research.

IHHC, which focuses on elder care, post-surgery care and palliative care, has a 200-strong network of experienced nurses and trained home care workers in Chennai and Bangalore. It costs Rs 700 to Rs 1,200 a day for hiring trained nurses, depending on the need and type of care.

Other such ventures in India include Delhi-based home healthcare company Portea Medical, which will soon expand operations to Mumbai and Hyderabad.

Thiyagarajan hit upon the idea of starting a home healthcare provider four years ago when a friend struggled to find a reliable home nurse for his mother. “The industry is dominated by local agencies that are mostly unreliable,” said Thiyagarajan. “The home nurse my friend finally found disappeared after stealing some money.”

He joined hands with Sameer Mehta, director of Chennaibased Dr Mehta’s Hospital, to set up the company in 2009. “So far, home care has meant a glorified maid,” said Mehta, who is also a member of The Chennai Angels, a group of earlystage investors.

IHHC is targeting to reach 2,000 patients a day in two years from 200 a day at present. It is targeting revenue of Rs 30 crore in fiscal 2016 and plans to have a presence in five cities, including Hyderabad and Pune. Thiyagarajan said Bayada will help IHHC to expand expertise in areas like cancer care and care for children with special needs. Bayada will also train IHHC’s nurses and caretakers.