Halcyon Group Promoted Abhay Soi aims big!
As a trainee at Arthur Andersen in 1996, a young Abhay Soi with an MBA from Belgium felt like an outsider among a host of IIM and IIT graduates who impressed the bosses ata the accounting and consulting firm with their analytical skills. As his training got prolonged, he grew impatient. But then came the defining moment of his career. “The only way to get acceptance is to make yourself indispensable,” a senior colleague advised him.He changed his focus to the emerging practice of financial restructuring, met company promoters and brought deals which made him indispensable to seniors like Munesh Khanna who would later transform India’s deal-making history. For more than a decade, Soi remained indispensable as a turnaround specialist and head of financial restructuring at KPMG and Ernst & Young (EY).Later, he honed his skills by cofounding an India-focused $300 million (Rs 1,880 crore at current exchange rate) special situations fund for American billionaire Seth Klarman’s Baupost group.Then, in 2009, he entered the healthcare industry as an outsider, but with proven skills that he acquired from working in other sectors. He helped Delhi’s age-old Dr BL Kapur Memorial Hospital turn around and is doing an encore with Mumbai’s iconic Nanavati hospital.The ongoing Rs 1,100-crore expansions for these two hospitals will place Soi’s Radiant Life Care among India’s largest healthcare management firms, with more than 2,500 beds in the heart of the nation’s top two metros.
The Budget has made some enabling provisions for people to spend more on health insurance and that’s one of the welcome steps for the healthcare sector. But, there is nothing much for luring more private investment to the sector. The emphasis on improving the quality of life and public health through Swachh Bharat is also a welcome move. The increase in tax exemption limit for health insurance from Rs 15,000 to Rs 25,000 is a remarkable feature of Finance Minister Arun Jaitley’s maiden full-fledged Budget for 2015-16. As pointed out by Finance Minister as well, the move will encourage more and more people to take health insurance. Apart from this the decision to set-up AIIMS in J&K, Punjab, Himachal Pradesh and Assam shows government’s commitment to take quality health care services to people’s doorsteps. Also, reduction in corporate tax over next 4 years would make investment climate more attractive and provide impetus to investment in healthcare as well
The 41-year-old chairman and managing director of Radiant has changed the rules of the game.
While traditional biggies went on to create hospital chains from the wealth of their experience in that field, Soi brought learnings from other sectors to resurrect the sagging fortunes of hospitals run by trusts. “From a non-healthcare background, he has the ability to think on commercial terms without carrying any old baggage. This has actually helped him structure innovative operating and management models for his hospitals,” said Dilip Khanna, partner, transaction advisory services, at Ernst & Young.
Soi’s model is simple, but with farreaching implications for trusts that are unable to catch up with the demands of the competitive healthcare industry. Radiant manages operations without owning any movable or immovable assets.
It was also his out-of-the box business model that set him apart from cash-rich corporate chains. Soi and his team brought some structural changes in the asset-light operations and management (O&M) model, which is widely used in the hospitality and healthcare sectors.
“O&M is asset-light and return on capital is very high,” Soi said, opening his mind on the deal economics. Radiant also redefined the paradigm by not imposing its brand on BLK and Nanavati and maneuvered a quick turnaround, thus setting a precedent, although he did bank on their existing goodwill to reintroduce them as super-specialty hospitals.
His biggest challenge is keeping up with international standards, say experts. “He faces the challenge of benchmarking his hospitals against his larger private sector peers and international facilities as India positions itself as a destination for medical tourism,” said Khanna.
The suave banker landed in the healthcare industry by default. Soi and his team were winding up the special situations fund as such opportunities were shifting to the US and Europe. He, then, got a chance to help revamp IHHS, India, a company that was engaged in the operations and management of BLK Hospital. “During the course of this assignment, we realised that IHHS promoters were looking to exit. We took over the company for $40 million and renamed it Radiant Life Care so as not to be confused with the Malaysian healthcare group,” said Soi, who is also the chairman of Ficci’s panel of medical tourism.
But that was only a beginning. The first thing Soi did was to hire Alok Nanda & Co, a firm specialising in the brand architecture for urban infrastructure. A revamping of branding followed. But the task was to rope in hospital administrators and clinicians as Radiant was new to the business.
By then, Soi knew how to take on the challenges head on. He turned his adversities into advantages. The result: Radiant’s revenue grew at a compounded annual rate of 55% and Ebitda at 90%, with medical tourism business comprising one third of revenue in the last four years. Its revenue is expected to reach Rs 65 crore per month by end of this fiscal. After the success with BLK, Soi was looking for a property that fits his vision of creating a “metro-centric quaternary care institute”. And his eyes fell on Nanavati.
Soi brought several new talents including Pramod Lele, former chief executive of Hinduja Hospital, and Rajendra Patankar of DM Healthcare and at least 40 senior management professionals within three months to effect a turnaround.
“My job is fire-fighting and organisational building,” says Soi. He claims that efforts have led to Nanavati revenues rising by 60% within the first four months.
If the grapevine is to be believed, Soi’s team is doing due-diligence to acquire some old hospitals in metros. If this happens, he will remain as the ‘indispensable man’ to resurrect the fortunes of hospitals with rich legacies.
Mr. Abhay Soi is a Co-Founder of Halcyon Group. Mr. Soi serves at Halcyon Enterprises. Mr. Soi served as Head of Financial Restructuring group at Ernst & Young and Arthur Anderson. He has in-depth experience in financial restructuring of Indian and global businesses. He has extensive experience in advising financial institutions on their Non Performing Asset Portfolios. Mr. Soi serves as Director of Infrahealth Pte Ltd. He serves as a Director at Integrated Health &