Diagnostic Special
leading players • Metropolis Healthcare It has a network of 105 diagnostic labs and 700 collection centres across India, Sri Lanka, Africa and Middle East. • Dr Lalpath Labs It has a central lab in Rohini in Delhi, and a network of 150 satellite labs and 2,000 collection centres. • SRL Limited It has 12 referral labs, over 244 network labs and 1,255 collection centres. • Thyrocare Technologies Two labs (in India and Bahrain) and over 30,000 collection centre.
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o, let’s analyse the trends that have emerged in recent times, trends that are redefining the way the industry is and will function, progress and make its moolah.
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Network of labs Gone are the days, when a successful pathologist set up one single lab that carried out all activities- from sample collection, testing to report delivery. The new-age players have segregated the tasks. While sample collection has moved to collection centres, testing is carried out in the satellite or central lab. This has made the groups spread their network faster and cater to a wider patient base. For instance, Dr Lal Pathlabs with its central lab in Rohini in Delhi, and its network of 150 satellite labs and 2,000 collection centres conducts 30 million tests annually. “With investment in a collection centre being one 20th of that of a lab, this model has ensured economies of scale,” says Dr OP Manchanda, CEO, Dr Lal Pathlabs. But no other group has accrued benefit of this model better than Thyrocare, which is the only brand that works with single laboratory for the entire country. As of now, it has one central lab in India and one in Bahrain to cater to the needs of GCC and MENA countries. And that’s it. It caters to 75 lakh patients through its 30,000 plus collection centres. Explains Dr A Velumani, managing director, Thyrocare, “Any laboratory or hospital or clinic can collect blood from patients and send it directly or through another laboratory to our
Most labs are investing heavily in automation.
If mergers and acquisitions trend is combined at the right time with Government regulatory control, it would lead to an excellent opportunity to organise the market” Ameera Shah managing director and CEO Metropolis Healthcare
laboratory in Mumbai.” After that, it is mere logistics management. “Our bar-coded collection kits are at 60,000 locations, and from there the journey of the specimen starts. Air-cargo logistics from 30 airports on same night, every night, helps us logistically to manage the business in many ways,” says he.
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PE funding The pathology business has found favour with PE firms. For instance, Metropolis has received two rounds of PE funding. First, from $7 million from ICICI Venture and then $85 million from Warbug Pincus in 2010. And the same year, CX Partners had invested Rs188 crore in Thyrocare. Once again last year, Thyrocare has raised Rs120 crore from Norwest Venture Partners. Additionally, Dr Lal Pathlabs received a funding of $10 million from WestBridge and in July, last year, SRL has reportedly raised $67 million from NYLIM Jacob Ballas and International Finance Corporation. Earlier, SRL had raised PE investment from Avigo Capital Partners and Sabre Partners. And Mumbai-based diagnostic chain, Suburban Diagnostics has raised Rs40 crore from Sequoia Capital. According to Dr Sanay Arora, managing director, Suburban Diagnostics, “Besides being recession proof, what attracts PE funding for the diagnostic market is its fragmented existence. The PE firms see a huge opportunity in
Healthcare Radius September 2013
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