IHH Boosts Fortis Stake, Targets 7,000 Beds in India by 2028

Introduction

IHH Healthcare Berhad, a leading international healthcare provider, is set to accelerate its expansion in India after increasing its shareholding in Fortis Healthcare. The Kuala Lumpur-based group plans to add approximately 2,000 hospital beds by 2028, aiming to solidify its position as one of the top three private healthcare providers in the country. This strategic move follows the completion of a mandatory open offer, which raised IHH's stake in Fortis Healthcare to 31.17%.

A Strengthened Strategic Position

The completion of the tender offer significantly strengthens IHH's control and strategic direction over its Indian operations. The company's shareholding now stands at 31.17% in Fortis Healthcare and 62.73% in Fortis Malar Hospitals, making it the largest shareholder. This increased ownership provides IHH with greater influence over Fortis's growth trajectory, operational efficiencies, and clinical governance. Prem Kumar Nair, CEO of IHH Healthcare, stated that the completion of the offer allows the company to “move decisively into the next phase of growth in India,” highlighting the move as a pivotal step in future-proofing the business.

The Expansion Blueprint: 2,000 New Beds

IHH Healthcare's core expansion strategy revolves around a significant capacity increase. The group currently operates over 5,000 beds across 35 hospitals in 11 Indian states through its Fortis and Gleneagles brands. The plan is to add around 2,000 new beds by 2028, bringing the total capacity to nearly 7,000. This expansion will be driven by a dual approach: brownfield projects to expand existing hospitals that are nearing full occupancy, and greenfield projects to establish new facilities in major metropolitan areas and tier-two cities. Confirmed upcoming projects include a 200-bed hospital in Greater Noida and a 550-bed facility in Lucknow.

Financial Ambitions and Market Focus

Alongside physical expansion, IHH has set clear financial targets for its Indian business. The company is aiming for operating margins to reach approximately 25%, which is in line with the market average for comparable assets in the country. India is a priority market for IHH, driven by structural tailwinds such as a large population, rising incomes, and expanding health insurance coverage. In 2024, the Indian market contributed $185.4 million to IHH's EBITDA, a notable increase from $153.8 million the previous year, underscoring the region's growing importance to the group's overall financial performance.

Fortis Healthcare's Complementary Growth Plan

Supporting IHH's broader vision, Fortis Healthcare has its own robust expansion strategy focused on densifying its presence in key clusters. Fortis plans to invest a capex of ₹2,500–₹3,000 crore between FY24 and FY27 to add 1,400–1,600 beds. This growth is primarily led by brownfield projects in high-revenue micro-markets like the National Capital Region (NCR), Mumbai, and Bengaluru. The company is also shifting its service mix toward complex, high-yield quaternary care, including oncology, robotic surgery, and transplants, to improve its average revenue per occupied bed (ARPOB) and lift its EBITDA margins to a target range of 18–20%.

Key Expansion and Financial Metrics

Synergies and Technological Innovation

A key part of the strategy involves leveraging synergies between Fortis Healthcare and IHH's other Indian brand, Gleneagles Healthcare. Ashok Pandit, IHH’s Group Chief Corporate Officer, noted that these collaborations are intended to unlock operational efficiencies and elevate care delivery across the country. The group is also expanding its digital health initiatives. Fortis is working with Virtuleap to integrate virtual reality into cognitive therapy, while Gleneagles Hospital Chennai has partnered with Vellore Institute of Technology on AI-led neuroscience research. These initiatives reflect a commitment to investing in cutting-edge medical technologies to improve patient outcomes.

Market Impact and Future Outlook

IHH Healthcare's aggressive expansion signals strong investor confidence in the long-term potential of the Indian healthcare market. The increased investment is expected to intensify competition within the private healthcare sector, potentially leading to improved standards of care and greater access to advanced medical services for patients. By consolidating its stake in Fortis and executing a clear growth plan, IHH is well-positioned to meet the rising demand for high-quality healthcare in India and strengthen its footprint in one of its most compelling global markets.

Conclusion

With its increased ownership in Fortis Healthcare secured, IHH Healthcare is embarking on a well-defined strategy to significantly scale its Indian operations. The plan to add 2,000 beds, achieve 25% operating margins, and leverage group-wide synergies underscores a long-term commitment to the market. As these expansion projects are commissioned over the coming years, IHH is on track to cement its status as a dominant force in India's evolving healthcare landscape.