About NEPHRO CARE INDIA Limited

Nephro Care India Limited was founded in the year 2014 by Dr. Pratim Sengupta in Kolkata with an object of providing comprehensive medical services for renal patients. As on date, Nephro Care is a one stop treatment centre based in Kolkata that offers a wide range of clinical and lifestyle solutions and services and renal insufficiency treatment to patients. The treatment framework covers the entire range of lifestyle, physiological and spiritual aspects of wellness. The operations of Nephro Care are supported by a pool of expert Doctors, experienced and well-trained paramedical professionals and a skilled management team. The entire team at Nephro Care is supported by sufficient clinical and investigative infrastructure. At Nephro Care treatment regimes are planned and practiced on the basis of core scientific understanding, transparency and ethics.

Initially Nephro Care’s offerings were limited to dialysis and renal OPD services delivered through 3rd party facilities of hospitals like Sahid Khudiram Bose Hospital, Fleming Hospital and Dreamland Hospital. Hence, till November 2021, the company’s earnings were limited to only the share of revenue agreed upon between the 3rd party facility owner and the company. In December 2021, the company set up their own daycare unit at JC-18, Salt Lake with facilities for offering a wide range of services.

The Company have entered into an agreement with e-Age Healthcare and taken up a dialysis unit (previously known as “Dial a Dialysis”) located in Kolkata. Nephro Care started operation at HB 113 from July 23 with their own staff and management. Renal insufficiency and kidney diseases have become a major health issue in India. The Pradhan Mantri National Dialysis Program (PMNDP) Report9 notes that in India every year about 2.2 lakh new patients of End-Stage Renal Disease (ESRD) are added in India resulting in additional demand for 3.4 Crore dialysis every year. The high cost of dialysis care leads to financial hardship for practically all families with such patients. 

At present they provide healthcare services to around 900 Chronic Kidney Disease Patients (CKD Patient) every month and engage over 5 permanent doctors along with 10 visiting consultants led by 70 experienced paramedical professionals from their flagship Salt Lake clinic with an area of 5,352 sq. ft. and three satellite clinics at Salt Lake (HB 113), Chandannagar, West Bengal (near Kolkata). And with their vision is to reach out to the masses through a holistic approach combining modern medicine with time tested yogic wisdom to touch the lives of one million kidney disease patients across the country by leveraging our hub-and-spoke model.

THE INDIAN HEALTHCARE SECTOR

The healthcare industry value chain in India includes hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The healthcare sector is growing at a brisk pace owing to its strengthening coverage, services, and increasing expenditure by public as well private players.

• The hospital industry in India, accounting for 80% of the total healthcare market, is witnessing a huge investor demand from both global as well as domestic investors. The hospital industry is expected to reach USD 132 Bn by 2023 from USD 61.8 Bn in 2017, growing at a CAGR of 16-17%.

• India ranked 10th in the Medical Tourism Index (MTI) for 2020-2021 out of 46 destinations of the world. The Indian Medical Tourism market size stood at ~USD 6.79 Billion in 2023 and is expected to reach USD 12.64 Billion by 2028 (growing at a CAGR of 13.23%).

• The diagnostics industry in India is currently valued at USD 4 Billion. The share of the organized sector is almost 25% in this segment (15% in labs and 10% in radiology).

• 1,60,000 Ayushman Bharat centers, which aim at providing primary healthcare services to communities closer to their homes, are operational in India.

• As a part of its efforts to provide access to high quality yet affordable healthcare to the masses, the Government of India has created more than 450 Million Ayushman Bharat Health Account (ABHA) IDs, registered 2,19,546 Health Facilities and on-boarded around 2,28,794 Healthcare Professionals boarded under the Ayushman Bharat Digital Mission (ABDM).

Breaching pre-covid level in FY22, expert agencies expect the Indian healthcare delivery industry to post healthy 10- 12% compound annual growth rate between fiscals 2022 and 2027, driven by long term structural factors, strong fundamentals, increasing affordability and potential of the Ayushman Bharat scheme.

According to the Institute for Health Metrics and Evaluation (IHME), a research institute working in the area of global health statistics and impact evaluation at the University of Washington in Seattle, the per person disease burden, measured as disability-adjusted life year (DALY) rate, dropped in India by 36% from 1990 to 2016, but there are major inequalities among the states with the per person DALY rate varying almost two-fold between them.

The Indian Chronic Kidney Disease (CKD)

CKD is a severe public health issue in India. As per government estimates, nearly 2,20,000 patients develop end-stage renal disease (ESRD) annually in India, leading to an additional annual dialysis demand of 34 million treatment sessions. Unfortunately, in India, renal insufficiency treatment focuses more on curative nephrology rather than preventive and holistic solutions.

Kidney disease is a significant public health concern in India, with high morbidity and mortality rates. The Million Death Study estimated a 50% increase in deaths due to chronic kidney disease (CKD) between 2001–2003 and 2010–2013. Several surveys have shown a high population prevalence of CKD. As many as one out of every five adults in highprevalence areas has CKD. Similarly, acute kidney injury is common and carries a high mortality, especially because treatment is frequently delayed. However, the National Programme for Prevention & Control of Cancer, Diabetes, Cardiovascular diseases and Stroke (NPCDCS), the flagship NCD prevention programme in India, does not cover kidney care.

However, the existing renal care infrastructure in India with around 5,000 dialysis centres (including 1,353 centres under the PMNDP7 ) and 3,340 nephrologists (estimated by the industry) is grossly inadequate to meet the upcoming demand for dialysis as this disease gains traction due to various sociological and environmental factors.

There are two major types of complementary treatments offered to ESRD Patients in India: Hemodialysis (HD) Treatment and Peritoneal Dialysis (PD). 94% of dialysis patients in India are on HD treatment.

Key challenges faced in India in the treatment of CKD include:
• Lack of access to dialysis centres and machines across districts, lead to low frequency of treatment impacting the health of patients;
• Erratic and low rate of reimbursements for dialysis sessions affects operation of dialysis centres;
• Lack of skilled workforce including dialysis technicians and renal nurses;
• Low uptake of PD in India due to high cost and low clinical adoption.

Renal Insuffuciency Treatment in India

Despite a sharp upturn in demand, the Hemodialysis market in India is just the tip of the iceberg. It has the potential to grow threefold. Out of the 2.4 million dialysis cases across the world, India contributes just a little over 4%. Around 80% of the End Stage Renal Disease (ESRD) patients in India start dialysis but only a third continue. Similarly, due to limited penetration in rural parts of the country, several cases are left untreated. As a preferred mode of ESRD treatment, India's hemodialysis market has huge headspace to grow and bridge the current unmet demand. Each year in India around 2.2 lakh new cases of CKD are identified.

Hemodialysis is the preferred mode of treatment but due to cost constraints and lack of availability of sufficient infrastructure, more than two-thirds of patients have to leave without availing full treatment. The value of the Hemodialysis market in India was estimated at ~USD 640 Million in FY21 with a total potential of USD 1,922 Million.

Kidney Transplantation and Dialysis in India

The living kidney transplantation program in India has evolved in the past 45 years and is currently the second largest program in numbers after the USA. Transplantation from deceased donors where neurological criteria are used for determination of death has been possible since 1995 after the Indian parliament passed the law related to transplantation.
It is estimated that almost 220,000 people require kidney transplantation in India. The rising incidence of lifestyle diseases such as diabetes and hypertension makes long-term follow-up of kidney donors in India an urgent consideration. However, currently, approximately 7500 kidney transplantations are performed at 250 kidney transplant centers in India. Of these, 90% come from living donors and 10% from deceased donors. The data are not as accurate as would be desirable due the absence of a national transplant registry.

EY has carried out an analysis of the state-wise demand-supply situation in the dialysis space across India in its paper “Dialysis delivery in India: demand, challenges and policy insights” published in March 2023.
As 220,000 new ESRD patients are added every year, state-wise distribution of new patients requiring dialysis can be estimated through establishing a causal linkage between the incidence of critical triggers (e.g. diabetes and hypertension) and the prevalence of ESRD. For representation purposes, EY has taken the weight of each state to be the share of diabetic persons in that state in total population suffering from diabetes. This methodology has been used as diabetes is known to the leading cause of ESRD.

NEPHRO CARE INDIA LIMITED STRENGTHS

1. Social Media Powered Community Engagement Model
2. Their technology backbone is robust and supports consistent improvements in the quality and efficiency of their service delivery
3. ‘Hub-and-spoke’ model with focus on quality patient care supported by modern infrastructure
4. Focus on Clinical Research and Innovations
5. Consistent Investments in Medical Technology and Cutting Edge Machinery to Improve Patient Outcomes

NEPHRO CARE INDIA LIMITED STRATEGIES

1. Continue to invest in extension of their Hub-and-Spoke network
2. Continue to attract, engage and train prominent, skilled doctors and other healthcare professionals
3. Enhance clinical capabilities and improve operating efficiencies
4. Extend clinical services outside the clinic and across the lifetime of the patient
5. Build on their thought leadership through increased focus on academics and research
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NEPHRO CARE INDIA LIMITED RISK FACTORS & CONCERNS

1. Their expansion into new business vertical, i.e. setting up a hospital, may expose them to new challenges and more risks.
2. Their revenues are significantly dependent on their flagship Salt Lake clinic.
3. The Company is yet to place orders for the equipments and machines required for their proposed multi-speciality hospital.
4. They may experience delays in commencement of operations of their proposed hospital or they may be unsuccessful in implementing their growth plans of expansion in a timely manner.
5. The patients may contract serious communicable infections or diseases at their clinics due to the risks typically associated with the operation of medical care facilities.
6. They may face difficulties in implementing their strategies including their expansion and diversification plans of entering new geographical areas, development and commercialization of new products.
7. They incur high expenses in relation to manpower cost, infrastructure and medical maintenance and repair costs, ancillary and various pharmaceuticals items.