As the Healthcare industry in India is in boom, there is a lot of opportunities for Investors to make healthy investments in Indian Healthcare Industry.

1. INVESTMENT DESTINATION MERGER PRIVATE EQUITY Health Care ACQUISITION JOINT VENTURE

2. Agenda

3. Section - I Healthcare Scenario in India – A review

5. Hospital market in India is expected to reach USD 54.7 billion by 2012 with private sector contributing USD 45 billion

6. Increasing number of hospitals in Tier-II and Tier-III cities is the major driver for private sector growth

7. Market is fragmented with large number of independent, privately run hospitals

8. Demand for healthcare far exceeds supply due to dismal performance by the government

9. A huge shortage of beds is a major driver for investment in a growing industry

10. Current figures of 9 beds per 10,000 in India is far behind the world average of 40 beds per 10,000

11. India needs an investment of USD 14.4 billion by 2025 to increase the bed density to 20 per 10,000

12. Specialty hospitals in particular are expected to grow faster than overall industry due to rise in heart diseases and cancerMarket Size and Growth – Healthcare Sector (USD Bn) Market Size and Growth – Private Hospital Sector (USD Bn) +27% Share of different Sectors in Health Expenditure Source - IBEF “Healthcare Industry Overview”, Jan 2010; Economic Times article “Healthcare to become $77-bn sector in India by 2012: Report”, Nov 2009; Business Standard article “Private hospital sector may touch Rs 2 lakhcrore by 2012: Study”, Dec 2009;

13. Continued…. Healthcare Segment’s Share Public & Private Growth (2005-2015) Public & Private Share in Hospitals Private sector 2005-2015 CAGR Source: McKinsey “India Pharma 2015 Prescribed Growth”, Aug 2007

14. Drivers & Challenges

15. Competition Hospital industry is dominated by the private sector with 78% market share Hospital industry in India is extremely fragmented due to the large number of nursing homes and small- to mid-sized hospitals Large private players are leading industry growth: Apollo Fortis Manipal Group Max Healthcare Global Hospitals New players are also entering the market and competition is limited due to the large untapped potential of the market Public Vs Private Sector New Market Players Source: E&Y “Healthcare in India, Emerging Market Report, 2007”, Healthcare Outlook “A Quarterly Report by Technopak” February 2007

16. Future Outlook Favourable policies on FDI and taxations will increase foreign participation Private equity investing significantly; investment set to increase, especially in regional hospitals Large hospital groups making strategic acquisitions but future opportunities may be limited Emergence of telemedicine for rural areas with participation from private sector and government Evolving concept of “Health Cities”, which have scale and provide a host of satellite services Despite increase in number of beds, supply constraints will remain in top cities

17. Section - II Foreign investments in India – A Review

18. Overview Source: IBEF and Ernst & Young “Healthcare: Market Size and Growth” Oct 2006, INBICS “Healthcare sector” Mar 2008, Investment Commission of India

20. Section - III Investment opportunities

21. Overview Medical College Hospitals Diagnostic chain Ayurveda & Homeopathy Specialty Centers Beauty & Wellness IVF Centers Nursing College & Allied Institutions Eye Care Centers Organ Transplantation Psychiatric & Rehabilitation

22. Section - IV Way Forward….!!

23. Deal Structuring – in detail Exit Policies Downside Protections Documentation Stage Selection of Appropriate Instrument IPO in India Buy back/Put Option ROFO/ROFR/Tag along/Drag along Strategic Sale Merger Breakups Portfolio sale Holding Company Model Ratchet Mechanism Entry level exchange control Issues Definitive transaction agreement Equity Share Convertible preference Shares Convertible debentures Warrants ADR’S/GDR’s FCCB’s Due Diligence Automatic route Post facto filings with RBI MOU/LOI Negotiations Identification of potential Investee Source: Nishit Desai Associates “Private Equity Investments in Indian Companies” June 2010.

24. FAQ’s 1. What is the startup cost structure and CAPEX required for making a hospital? 2. What is ratchet mechanism? Whenever the company issues additional shares to a third party at a price that is lower than the investor’s entry price, then such investor would get issued such number of additional shares at no cost to ensure anti-dilution of the investor at no additional cost. 3. Why PE firms using holding company model to create more exit options and reduce risk? In the holding company model all the investments in a sector such as healthcare would be made by the holding company. The advantages of having such structure includes: Multiple hospitals under single focused management Exit options like direct initial public offering, secondary stake sale, listing of individual companies Investments are not limited by confident investors or limited partners Economies of scale in procurement and top management bandwidth utilization. e.g. PE firm Sabre capital invested Oyster & Pearl Hospitals in Pune under the holding company Sabre Healthcare.

25. For Further Queries Kindly Contact.. Dr. VarunGoyal Project Associate EPOS HEALTH (INDIA) PVT. LTD. 445, UdyogVihar Phase-III Gurgaon - 122016, Haryana, India Ph #. 91 9650639318 Tel #: 91 124 4264900 Fax #:91 124 4264906 Email: varun.goyal@epos.in Skype: varungoyal1984 Website – www.epos.in