Bajaj Group eyes healthcare venture as hospital bed demand rising steadily

The Rs 1.46 trillion Bajaj Group is preparing to foray into healthcare through a chain of hospitals, according to reports.

The healthcare business venture is likely to be headed by Nirav Bajaj, who currently oversees corporate strategy at Mukand. However, the investment plans have not yet been finalised.

The hospital sector is on a growth trajectory, with top Indian private hospital chains announcing major expansion plans for financial year 2024-25 (FY25). This follows a growth in average revenue per occupied bed (ARPOB) per day in financial year 2023-24 (FY24), indicating increasing demand for services. India remains largely underserved in terms of healthcare coverage. Consider these statistics: India has just 5 beds and 8.6 doctors for every 10,000 people, according to the Organisation for Economic Co-operation and Development (OECD). These figures are among the lowest in the world.

According to the Ministry of Health and ICICI Securities, life expectancy in India is likely to cross 70 years by 2031, leading to a rise in the ageing population. The share of senior citizens in the population is expected to rise to 13 per cent in 2031, up from 8.5 per cent in 2011.

This demographic shift will drive domestic demand for healthcare. Another major driver of healthcare demand is the rise in non-communicable diseases, particularly cardiac ailments, due to changes in lifestyle. This may be an opportune time for the Bajaj Group to enter the sector.

This could also mark the rise of the next generation in the Bajaj family, where Niraj Bajaj, chairman of Bajaj Auto and son of the late Rahul Bajaj, will be heading his own venture, diversifying the 96-year-old business house founded by Jamnalal Bajaj. Niraj Bajaj is also the chairman and managing director of Mukand, which specialises in specialty steel products. Meanwhile, Rajiv Bajaj's son, Rishab, joined Bajaj Auto in FY22 as a management trainee and currently holds the designation of divisional manager (product strategy – electric vehicle) in the company.

The new healthcare venture has also set up an office in Lower Parel, Mumbai.

It is not yet clear whether the family office of the Bajaj promoters will be investing in the healthcare venture or if the Group companies will be making the investments. The Group companies include Bajaj Holdings and Investment (the investment arm), Bajaj Auto, Bajaj Finserv, Mukand Industries, Bajaj Electricals, and Hercules Hoist (materials handling).

The Bajaj Group operates through a family council that includes the late Rahul Bajaj’s cousins Shekhar, Madhur, and Niraj, as well as his sons Rajiv and Sanjiv. This council was formed around three years ago, and they meet once every one and a half months to discuss business and family matters.

In March, the Bajaj Group committed Rs 5,000 crore to social impact initiatives over five years, with a sharp focus on skill development under ‘Bajaj Beyond’ – the Group’s new identity for all its corporate social responsibility (CSR) and charitable programmes. The initiative aims to benefit over 20 million youth and enable them to take advantage of the employment and entrepreneurial opportunities offered by India’s growing economy.

In the last ten years, the Bajaj Group has contributed close to Rs 4,000 crore towards various CSR initiatives, primarily focused on skilling and education, health, livelihood, water conservation, and several other areas of development.