Rajit Mehta, Managing Director, Max India

23 Apr 2022 , 10:43 AM

In an interaction with Mamta Maity, indiainfoline.com, Mr.Rajit Mehta, Managing Director, Max India said “We had commenced our journey way back in 2013, when the first community in Dehradun was setup and since then that project has done extremely well.”

Can you briefly explain the business model of Max India and Antara? When the company was established and how did we enter this senior care industry?

Max Group is known for identifying early trends, opportunities, shaping up the businesses successfully and creating iconic brands. We had spotted life insurance business in 2000 and established Max New York Life which is currently the fourth largest private insurer in India with a valuation worth INR 40,000 crore. Max Healthcare was founded in 2002 and quickly became a well-known brand in the North. With a market capitalization of INR 36,000 crores, it is currently India’s second largest hospital chain. Similarly, we spotted the senior care opportunity in 2010 and since then we have been working hard to make sure that we are able to carve a niche out of it.

Max India is now the holding company of Max Group’s Senior Care business — Antara which is an integrated service provider for all senior care needs. The company foresees a growth of 8% in the senior care industry which is currently worth USD 10 to 12 billion. The population of seniors will increase from 8% currently to 20% by 2050. The life expectancy has gone up coupled with disease burden unfortunately. Approximately 17% population have dementia, 2% are witnessing loneliness and ~20% to 25% are staying alone.       

There are four value pools that we have selected. Residences for seniors, which is accommodation, is meant for people who are relatively healthy, but want to live in a safe, secure, hassle-free community, But if there are seniors, who have the age-related issues and need help in their daily chores like feeding, bathing, mobility, medication, monitoring or have gone through a very intense medical episode like a cardiac bypass surgery or a transplant, they need care homes for rehabilitation or memory care homes. Then we have care at home in case seniors require services in the convenience or in the comfortable environment of their home whether it is to do with diagnostic, x-ray, physiotherapy, critical care. Lastly, medical equipment segment, which is more in terms of bathroom accessories or ortho kit aid, respiratory aids, helping them made their recovery. This is how we are creating the integrated care ecosystem for senior.

Can you please throw some light on the industry dynamics? What is the current industry size and the underlying opportunity in the segments like residences for seniors and assisted care services?

The overall market is fragmented currently with some players who are doing care homes/ memory care only. Some others are into Assisted care segment. Nobody is stating the entire value chain, we are the only ones doing it. In terms of market size, it is already a USD 10 to 12 billion market with value pools around residences for seniors, care homes, care at home services and medical equipment’s. If we break down the overall size into segments the residence for seniors is about USD 1 billion market size followed by Care at Home is at USD 3.9 billion. Assisted living is ~USD 1.1 billion and Medcare products is at USD 515 million. Antara and Max India are quite uniquely placed to take advantage of the opportunity given our background in healthcare, infrastructure, hospitality because we do need to bring all these competences to be able to provide an integrated care ecosystems for seniors.

If you look at the India demographics, country’s senior population of age 60+ is expected to grow faster than any other age group in the coming 2-3 decades. The current senior population of 130mn, which is at 8% of population is estimated to increase to 20% of population by 2050. So, the healthcare spends of senior household, which are already 3-5X of others driven by increased life expectancy and nuclear families, are expected to increase further in the coming years as the senior population increases. So, these are the main drivers for senior care industry.

In residences for seniors’ segment, which states or cities we are currently present in and how has been the sale of these residences at these existing locations?

We had commenced our journey way back in 2013, when the first community in Dehradun was setup and since then that project has done extremely well. Antara’s Dehradun project is a flagship project spanning across 14 acres and has a clubhouse of 60,000 sq.ft. In that project, we had bought the land, constructed it, developed it, sold, and operating the facility. It gives me immense pleasure to share with you that 91% of Dehradun inventory has already been sold and inception till date we have collected about Rs510 crore till the end of March 2022. The monthly sales velocity has gone up phenomenally to 3 units and monthly sales collection of Rs8 crore in Q4FY22 and prepaid its entire project debt in March 2022 resulting Dehradun to be cash and PBT positive for FY22.

The second facility is at Noida sector 150 which is a marquee sport sector of Noida. We have adopted a different model at this facility which provides high IRR. Currently Noida phase 1 has been launched, which was done in Jan 2020 and about 73% of the inventory has already been sold. In terms of collections, we have collected about INR 82 crores till Q4FY22 and achieved a monthly sales velocity of 12 units and monthly sales collection of more than Rs5 crore. To securitize seamless construction activity at the Noida community, Rs75 crore term loan facility was secured from ABFL in March 2022. The construction of the Noida community is in full swing and is expected to be completed on time by early 2025.

Please throw some light on the different business model which you have implemented at Noida and how beneficial is it for the company in terms of better profitability?

Noida of course as I said earlier is a different format. It is more affordable as compared to Dehradun both in terms of the capital outlay as well as the monthly maintenance. From Dehradun, all the learning were leveraged to launch a second community in Noida. This is a developer model, where we have a partner who has contributed the land and the SPV has taken the debt. But, the design facilitation, the construction and the operation will be with Antara and it is a very healthy IRR.

The advantage in Noida is, given our success, we have been selectively increasing the prices every year which helps the IRR and going forward, we would like to replicate this model of focusing on a core competency of designing, sales & marketing, and operating the facility as we expand beyond NCR.

Coming to the second business – Assisted Care services, please share more details on this segment?

Assisted Care Services is the second big bet we took on the value pools of integrated senior care platform. This comprises, as I said earlier, care homes, care at home and MedCare product verticals. We launched these in April 2020. So far till Mar 2022, we have served about ~6,200 patients. We have launched four care homes with 89 beds (includes 10 beds for memory care), 16 products and services in care at home which are critical care, physiotherapy, diagnostics, nursing, patient care giver etc. We are the largest service provider in Care Home category in Delhi-NCR We have also launched India’s first mobile health check-up van which is fully loaded with all the necessary facilities. it is even more relevant in today’s times as it can go to seniors’ house and the senior doesn’t have to go for executive health check-up in the current circumstances.

On the medical equipment side, we have launched about 1,100 SKUs, a very robust backend in terms of inventory management, warehousing, logistics also fundamentals of the clinical, non-clinical processes for all the verticals are in place. Happy to report, we are the youngest organization to receive QAI certification for a care at home vertical. This is similar to for example NABH does for hospital, so we have certified all our processes in the vertical of care at home and find it good enough for the certification. Again, a great vindication of the fundamentals that we have put in place from a customer perspective also in the three verticals the customer satisfaction scores have been consistently above 80% and for December they were as high as 90%.

Do you see any synergies playout between your different segments?

Yes. Just to give you an example, In Dehradun, we are seeing synergies now because as the residents aged, their healthcare needs are going up and the healthcare services are now being provided by Antara assisted services. So, wherever we setup communities, the healthcare services will continue to run by Antara assisted care. There are sometimes many people who come into care homes and want a long stay option and thereby they look at residences, the synergies are also playing out in terms of infrastructure, technology and staff.

What is the key strategic focus of Antara? What is the company’s aspiration and medium to long term strategy in terms of efficient capital allocation and increase its overall profitability keeping the balance sheet strong?

Antara is focusing on four million customers in the income segment of INR 15 lakh per annum and above across three clusters of North, West and South. We are already present in NCR and we will also look at the West and South cluster going forward.

Antara aspires to be a multi-location company over the next 5 years to 6 years with 5 to 7 communities in the residences, 35 to 40 care homes, memory care home, a very robust care at home and medical equipment business. We are all set having taken a very early bet, having learned, leveraging the learning now to expand the USD 10 to 12 billion sector and creating an integrated care ecosystem for seniors. We are the only one attempting to do so there is nobody else. Everybody else is playing part of the value chain. Nobody is stating the entire value chain, we are the only ones doing it.

Our endeavour is to achieve higher growth by having a sharp focus on all the four verticals mentioned above. Antara is outlined a 5-year vision where in the Company plans to invest Rs300 crores across all verticals. As stated earlier we have enough liquidity in the balance sheet to fund the growth, in the residences segment our strategy is Enter, Expand and Excel. We like to enter a particular geography expand our outreach and excel in operations to deliver best in class services to our seniors. In the care home segment, the emphasis on increasing occupancy, increasing scale and exploring other variants of short stay and low-cost offerings for care at home to expand the different products that we already have and create differentiation and Medcare is poised to grow on the back of industry tailwinds and Antara brand with seamless business.

We continue to maintain a very robust balance sheet position with the consolidated net worth of Rs638 crore as of Dec’21. We have enough treasury corpus of Rs410 crore and other assets of about Rs160 crore as on March 31, 2022 to support both capital reduction of Rs92 crore and Antara growth aspirations.