The Calcutta-based cigarette-to-hotels conglomerate, which is currently building a luxury hotel in Colombo, will seek the approval of its shareholders to set up multi-specialty hospitals and promote medical tourism, Indian news reports said.
According to The Telegraph - Culcutta, the company in a letter to stock exchanges said its board had recommended the entry into the healthcare segment and expanded its articles of association through a special resolution.
“In the context of your company’s vision to sub-serve national priorities which has driven the company’s operations, diversification initiatives and CSR policies and practices, the board has recommended exploring and entering the area of healthcare in India, inter alia, by way of setting up state-of-the-art world class multi specialty hospitals,” the company said in an explanatory note to a postal ballot notice for shareholders filed with the Bombay Stock Exchange.
“Such an initiative would leverage the company’s repertoire of knowledge and experience in the hospitality and tourism sector and can be utilized for supporting ‘medical tourism’ for the country using the multi-specialty world class facilities. Your board believes that world class medical facilities providing patient-centric best practices that would be valued and trusted by society will drive reform in healthcare in India,” said the note.
Besides hospitals and medical tourism, ITC will set up diagnostic centres, pharmacies, nutrition centres, medical colleges and participate in skilling.
ITC’s diversification into healthcare comes amid operational challenges in its cigarette business on account of tight liquidity condition and regulatory and taxation pressure on the legal cigarette industry.
Cigarettes made up 63 percent of the company’s revenue in the nine-month period ending December 31, 2016.
According to market analysts, the company’s decision to set up multi-specialty hospitals will require capital investment, but studies suggest there is plenty of scope in medical tourism.
A study by Grant Thornton shows nearly 80 percent of medical tourism arrivals in India are driven by the low cost of treatment compared to other countries
A KPMG report estimates the Indian medical tourism market at around US$ 3.6 billion in 2015, which is expected to reach US$ 10.6 billion by 2019, representing a compounded annual growth rate of 30 percent.