Next year, construction will kick off for a 350-bed Manipal Hospital in Rajarhat, a fast-growing suburb on the outskirts of Kolkata. The new hospital will be one of several built from the ground up, to bring quality healthcare to underserved communities across India. 

A year after Temasek acquired a majority stake in Manipal Health Enterprises, expansion plans leveraging its financial acumen and Manipal’s healthcare expertise are well underway. “We are putting the capital to work,” says Ved Kalanoria, a Director with Temasek’s Investment Group (India) , who played a key role in closing – and now overseeing – the largest deal  in India’s healthcare sector.

“Building a robust healthcare network is a commitment that will take time to mature,” he admits, “but this is not a three or four-year bet for us, we are here for the long term.” 

Finalised in April 2023, the deal reflects Temasek’s strategic focus on investing in structural trends shaping the future. One such trend - longer lifespans – accounts for  the growing demand for quality healthcare in India.

For Ved, Temasek’s majority position brings a significant change in perspective. “Having a small stake in a company with a shorter time horizon in mind is a different experience – emotionally – from being the largest shareholder and building a business for the long term" says Ved. “Every decision you make is made with an owner's mindset.

“Your role is more involved, more entrepreneurial, and more engaged.”

Building for generations

By the time he joined Temasek in 2012, Ved had spent seven years in advisory and investing, including with Merrill Lynch and Rothschild.

“I was looking for an opportunity where I could be part of a small, agile team building up businesses in India and investing for the long-term.”

At the time, Temasek’s Mumbai office was transitioning to new leadership. Long-term investments, along with the idea of creating growth platforms, were emerging as key strategic focal points.

“In sectors  we believe capital would be a differentiator, we were willing to take more concentrated bets,” explains Ved. “We were willing to roll up our sleeves, and be more involved.” 

India’s growing healthcare sector was a prime candidate. While demand for quality healthcare was growing, supply was sorely lacking. “We saw a large role for the private sector,” he says. “We invested in a few assets, minority stakes initially, and they generated good returns.”

Manipal Hospitals was an attractive asset with a strong value system. It was a well-known brand, with a well-respected founder and a legacy of care spanning three generations. In 2017, Sheares Healthcare, a wholly-owned Temasek subsidiary, took an 18% stake in the company. “The idea was to first understand the business better,” says Ved.

By then, the Bengalaru-based healthcare provider had grown from a single hospital in Karnataka in 1958 to a network of 15 hospitals across five states. With the 2017 capital injection, Manipal’s network grew to 29 hospitals in 16 cities to become a pan-India healthcare provider, and was poised for even greater expansion.

To fuel this next stage of growth, the founding-family sought to bring onboard a long-term partner. It was then that Temasek approached them with the idea of acquiring a controlling interest in Manipal Hospitals, and working collaboratively with the family and management team to further build out the business.

Manipal’s experience over the previous six years with Sheares Healthcare, combined with its understanding of Temasek as a broader institution, paved the way for the transaction, says Ved.

“The Manipal brand has been in India for decades, and the family wanted to ensure that they passed the legacy to the right custodian,” he says. “We were committed to holding the platform for the long term, and working with the family to maintain the brand that they had built up over three generations. Perhaps more importantly, we shared their vision of high-quality, accessible, and affordable healthcare.”

The desire to see the healthcare brand continue to make a positive impact for generations resonated with Temasek’s own purpose: So Every Generation Prospers.

“In that, we were completely aligned.” 

Thinking globally, healing locally

With the reshuffling in Manipal’s shareholding, the partnership dynamic has evolved.

“Our engagement has intensified,” says Ved.The role that both he and Temasek now assume entails working with an owner’s mindset. “ We ensure the organisation has the people and processes with the right DNA,” he says, “and we trust them to run the business.”

As a global entity, Temasek also acts as a bridge to the rest of the world. “Healthcare is inherently local,” Ved acknowledges, “but as a global player, we can connect Manipal to best practices and cutting-edge technologies from around the world.”

Ved remembers when his grandfather’s medication was delivered in unlabelled and unsealed pouches. It is a far cry from the secure, barcoded packaging today, traceable to the exact manufacturing facility and date. “The best of what is available in Asia, and probably the world, is now available here in India.”

The key, he says, is supporting the right teams with the foresight to navigate the future. In that, investors like Temasek play a crucial role. “If you take away Temasek and its patient capital, some of this asset creation and some of this technology would not have been possible.”