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NARAYANA HRUDAYALAYA: FROM HEART CARE TO HUMAN CARE

Tanusree Mazumder and Professor Radha R. Sharma wrote this case solely to provide material for class discussion. The authors
do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain
names and other identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
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Copyright © 2014, Management Development Institute Gurgaon and Richard Ivey School of Business Foundation Version: 2014-10-21

On July 14, 2003, headlines flashed on the BBC and Doordarshan television channels. The hole in the
heart of Noor Fatima, a two-year-old girl from Pakistan, was plugged at Narayana Hrudayalaya,
Bangalore, India, by Dr. Devi Shetty and his team. Television channels and newspapers including the
Tribune and Times of India vied with one another to report on this miraculous achievement. The complex
surgery that lasted for six hours not only saved the life of baby Noor Fatima but also eased some of the
persisting tension between India and Pakistan. This created a hysterical reaction in the mass media across
the borders and Dr. Devi Prasad Shetty, the chairman and managing director of Narayana Hrudayalaya,
was flooded with interview requests and calls from the media and various news channels. Dr. Shetty, in
an interview with Frontline, said that Narayana Hrudayalaya attributed its success and media reaction to
the “yearning for peace, a strong subcontinental trait.”1 It was a landmark surgery that also strengthened
relations beyond the two countries.

When the euphoria was over, Dr. Shetty looked out the window of his large austere office in the cardiac
block of the hospital and pondered how he could realize his vision of providing affordable healthcare for
the masses worldwide. How could he reach out to them and subsidize surgery costs for the poor? Also,
what should he do to attract the best minds in surgery to Narayana Hrudayalaya (NH) and retain them at a
time when compensation for doctors was rapidly increasing in India’s corporate hospitals?

HEALTHCARE INDUSTRY IN INDIA

The health care industry in India was estimated to be worth about US$44 billion in 2010.2 From 2003 to
2012, various hospital brands such as Fortis, Apollo, Max, Global and Care had been expanding in India.
The Indian healthcare sector was becoming one of the nation’s fast-growing service sectors, with a
1
Frontline, Volume 20, Issue 16, August 2 - 15, 2003,
www.frontline.in/navigation/?type=static&page=flonnet&rdurl=fl2016/stories/20030815004103400.htm, accessed February
7, 2013.
2
Equity Report 2010 and at a compounded annual growth rate of more than 9 per cent. This sector was predominantly
privatized and accounted for more than 80 per cent of total healthcare spending in India, with 75 to 80 per cent of hospitals
being managed by the private sector.

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contribution of 6 to 7 per cent to gross domestic product. An increase from $2 billion in 2006 to almost $8
billion in 2015 was expected in the market.3 The percentage of the Indian population that had access to
and coverage by health insurance was minimal and was often perceived as being inconsequential, as the
numbers were so low. Health insurance [was] expected to touch US$5.75 billion by 2010.4 Health
insurance was a concern, as a significant portion of the population was without it; yet a growing middle
class in India that spent money on healthcare led to the possibility of the emergence of a health insurance
market.5 According to the Indian Brand Equity Foundation, it was “estimated that Cardiovascular
Diseases (CVD) were among the top three contributors to the country’s total disease cases amounting to
about 10 per cent.6 These situations had created the need for an innovative approach towards this health
concern7 and Narayana Hrudayalaya was considered to be an option by the noted cardiac surgeon, Dr.
Shetty.

A CHANGE OF HEART FOR DR. DEVI PRASAD SHETTY

Dr. Shetty was the eighth child of his parents and was born in Mangalore, Karnataka. He studied at
Kasturba Medical College, Mangalore, and specialized as a cardiologist at Guy’s Hospital London in
1989. While at Guy’s Hospital, he met the renowned industrialist and visionary leader B.M. Birla, who
was so impressed with Dr. Shetty’s keen insight and deep knowledge that he invited Dr. Shetty to set up
the B.M. Birla Heart Research Centre in Kolkata, India. Dr. Shetty returned to India only too happy to set
up India’s first cardiac care centre in Kolkata.

Dr. Shetty had specialized in a very rare and new form of surgery and was also the first surgeon to offer
this unique surgery in the country. While at the B.M. Birla Heart Research Centre, he had the opportunity
to treat and nurture many hearts and gained an unprecedented following. Patients were overwhelmed and
were heard saying, “Thank God we have him; who else would have healed us?” This was the first hospital
in India that specialized in reconstructive operations on babies, and it covered the entire spectrum of
cardiac ailments for both children and adults. This heart centre had many firsts to its credit, ranging from
angioplasty conducted on a 94-year-old patient to extracorporeal membrane oxygenation performed on a
neonate for respiratory distress. It was here that Dr. Shetty developed and sharpened his expertise in
surgery and had a huge following of patients that generated business for the hospital. He also learned
about managing the running of an enterprise in his close interactions with the stalwart B.M. Birla. The
scale of operations and access to medical equipment and patients was hard to imitate and come by. Dr.
Shetty worked on cutting-edge surgery and experimented with new procedures and techniques that he had
learned in Britain. These surgeries were cost-intensive, but the hospital could afford them and it was
possible to perform them despite their prohibitive costs.

It was here that Mother Teresa was admitted with a cardiac ailment. The surgeon entrusted with the task
of healing and attending to Mother Teresa was none other than Dr. Shetty, owing to his rare and valuable
skills and expertise. During his several close encounters and field trips with Mother Teresa, he was
moved by the plight of the needy and poor. Those interactions left an indelible mark on him and he
struggled to find a course of action. Mother Teresa, during one of their many interactions, asked Dr.
3
Nishith Desai Associates, “Investment in Healthcare Sector in India,” December 2013,
www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Investment_in_Healthcare_Sector_in_India.pdf,
accessed February 7, 2013.
4
Ibid.
5
Ibid; Study by PHD Chamber of Commerce and Industry, New Delhi.
6
“Building a Healthcare System,” an interview with Dr Devi Shetty and Kiran Mazumder Shaw on India’s Healthcare
Challenge, Bloomberg UTV, September 19, 2011, www.youtube.com/watch?v=yGmQDReeWhQ, accessed February 7,
2013.
7
Nishith Desai Associates, op. cit.

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Shetty what he would do to drive that single agenda with determination and focus. This was a turning
point in his life and he decided to reach out to the masses and make a difference in their lives. While at
the B.M. Birla Heart Research Centre, he experimented with performing a greater number of surgeries per
day in order to heal and reach out to a larger patient base, while the norm was three or four surgeries a
day, he performed six or seven. This was unheard of during those years and was not particularly
appreciated. With his desire to reach out to the masses and create subsidized healthcare, he struggled to
find an answer. It was at this juncture that he received an invitation from the Pai Group to set up the
Manipal Heart Foundation in Bangalore. While Kolkata and its people had won a warm spot in his heart,
his vision of wanting to reach out to the masses and create a difference in the lives of patients was tugging
at his heart and playing on his mind. He was torn between competing and conflicting choices. His
colleagues would say, “Why is he leaving the comforts of a corporate hospital with all the benefits and
infrastructure to go to Karnataka, an unheard-of place for cardiac care? Why is he leaving, especially
since B.M. Birla knows him personally and takes so much personal interest in Devi?”

Patients were heard saying, “Why is he leaving, and what will happen to us?” Patients who he had treated
heard the buzz around Dr. Shetty’s possible move to another city and chatted among themselves. Some
patients said, “How will he treat us now?”

With several competing choices, Dr. Shetty had almost made up his mind to leave Kolkata and return to
his homeland of Karnataka, but he promised B.M. Birla that he would continue to visit the patients at
Kolkata and treat them free of charge. Dr. Shetty assured his patients that he would not abandon them, but
rather would continue to visit and meet them in Kolkata. He left the B.M. Birla Heart Research Centre,
which was so close to his heart and mind. On the one hand, there was the comfort and security of a large,
privately owned hospital supported by none other than the legendary industrialist B.M. Birla himself,
while on the other hand there was Dr. Shetty’s inner calling of reaching out to the masses and treating
them. While patients flocked to meet him and continued to reach out to him from across the country and
the globe, the scale of operations also expanded and grew. Shetty had established himself as an exemplary
doctor.

Dr. Shetty reached his hometown of Karnataka and started setting up the Manipal Heart Foundation in
Bangalore. While at the Manipal Heart Foundation for four years, he was still exploring ways to offer
low-cost surgery to the poor. At the foundation, along with his team, he once again experimented with
increasing the number of surgeries per day. Wockhardt Hospitals, which had been set up in 1989, was a
competing leading cardiac care unit; Manipal Hospital conducted six surgeries a day, which was far ahead
of its competitors and enabled its reach to more patients. Dr. Shetty believed that the only way to reach
the masses in need of cardiac care was to conduct more surgeries per day. Some believed this was
impossible, infeasible and even ridiculous. Dr. Shetty was not deterred by these naysayers and continued
to pursue his goal of finding an answer to his problem of increasing the number of surgeries per day so
that more patients could be treated.

M.S. Rao, the head of Audit, during the early years of NH, who was revered as the guru of NH and
worked closely with Dr. Shetty, later said in an interview that during his Manipal Heart Foundation days,
he had observed, “Dr.Shetty just would not give up.” Both at the B.M. Birla Heart Research Centre and
the Manipal Heart Foundation, Dr. Shetty was appalled to see the rising number of cardiac surgeries. Dr.
Shetty said in an interview that the average age of the patient who underwent heart surgery was 65 in the
United Kingdom but 45 in India. He believed that the hospitals within the country together conducted
80,000 to 90,000 surgeries per year, while India needed to perform 2,500,000 surgeries per year. The
chasm seemed to be increasing and he wondered what to do.

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He asked himself, “How will I increase my reach to the poor and the needy patients and at the same time
provide superior quality and cost-effective procedures?”

Dr. Shetty was not willing to give up. He left the Manipal Heart Foundation that he had founded and
continued to experiment with performing a greater number of surgeries per day to help find an answer to
the quandary of affordable heart care for the masses. His colleagues Ramesh and Rajeev wondered, “Why
is he leaving this hospital?”

NARAYANA HRUDAYALAYA: EVOLUTION AND GROWTH

Narayana Hrudayalaya was set up in Bangalore, South India, in 2001. It was the first cardiac care centre
in the state of Karnataka and had a vision of “to provide high quality healthcare, with care and
compassion, at an affordable cost, on a large scale.” NH was founded by one of India’s oldest
construction companies, Shankar Narayana Construction Company.

In 1998 Dr. Shetty wrote a business plan that explained the volume and scale of heart surgeries that he
had envisioned and approached investors to share his vision. Initially, the uptake was dismal. M.S. Rao
said, “Devi believed that having knocked on many doors, someone would answer, and therefore was not
willing to give up.” The potential investors found it hard to believe that this model would provide for
subsidized costs and yet also provide superior quality. The equipment suppliers and vendors were not
ready to consider the approach or offer competitive rates. Narayana Construction, the largest construction
company in the state, invested in Narayana Hrudayalaya, but this financial backing was not enough.
Though this financial backing provided the initial seed money, it did not cover the cost of expansion and
the significant cost of infrastructure and equipment for the cardiac care centre. NH started with the first
cardiac care unit located on the sixth floor of the NH building with 10 operating theatres and a team of 20
doctors who had moved with Dr. Shetty from the Manipal Heart Foundation. With dreams and hope, the
founder set up Narayana Hrudayalaya in 2001 in Bangalore. Newspaper headlines flashed across the
country that read “The first cardiac care centre for the needy,”8 “Healing touch for the needy” and “Dr.
Shetty: God for the poor.”9

When Dr. Shetty told his colleagues that he would scale up the number of surgeries performed per day to
a minimum of 20 to 25, the medical cardiac fraternity laughed at him. Some even said that he was getting
too ambitious and that his plans were absurd. This did not deter him, but rather made him even more
resolute, and he continued to experiment with various business models to increase the number of
surgeries and enable more patients to be treated.

The motto of NH was “caring with compassion.” The cardiac unit was one of the world’s largest heart
hospitals and performed 30 major cardiac surgeries per day. The telemedicine network at NH was a joint
venture with the Indian Space Research Organization and was also used extensively across the chain of
NH hospitals. NH hospitals had over 100 telemedicine centres connected across the country, including 13
coronary care units. The telemedicine network provided quicker access to information prior to surgery
and facilitated a deep understanding of the various complicated surgeries. It would go on to treat over
53,000 cardiac patients absolutely free. The telemedicine network of the NH hospital also connected to
countries outside of India — namely Mauritius, Pakistan and Malaysia — since affordable heart care did
not exist in these countries. It also saved patients the trouble of travelling only to realize that they did not
need surgery. NH received the accolade of being the world’s largest pediatric cardiac care centre, with
half of its patients being children and babies. The organizational structure of NH is given in Exhibit 1.
8
http://forbesindia.com/slideshow/magazine-extra/day-in-the-life-of-devi-shetty/1852/1, accessed February 7, 2013.
9
www.iammadeinindia.com/?p=1020, accessed February 7, 2013.

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The charitable wing of NH was headed by Lakshmi Mani, who said, “We have never turned away a single
patient who was unable to meet the costs; we told them to pay whatever they could and we paid the rest.”

THE DILEMMAS

Dr. Shetty asked, “How will I achieve these numbers and yet remain a sustainable enterprise?” He
experimented with 12 surgeries per day, which was unheard of in the healthcare sector. All the competing
hospitals such as Workhardt Ltd and Manipal Hospital conducted four surgeries per day. Dr. Shetty felt
the needed to expand his team of doctors to meet this rising number of surgeries, but at the same time did
not want to burden the doctors with any revenue targets. He strongly believed that it was his personal
mission to provide cost-effective surgery and that he should not force it in any way onto the team of
doctors.

He reached out to the best cardiac surgeons in India and abroad and sought rare skills and expertise. He
spoke to the surgeons personally and convinced them of his vision and met them to encourage them to
join NH. At the same time, he was burdened by competing thoughts of how he would retain these skilled
doctors who were equipped with cutting-edge field expertise. The market outside paid hefty
compensation to these doctors for their rare skills, while he could not pay at par with the competition. He
needed to retain them if he wanted to reach both scale and volume. Dr. Shetty personally handpicked his
team of doctors and looked for a positive, can-do attitude coupled with the crucial ability to perform
world-class surgeries. Several doctors who joined Dr. Shetty at the inception of the hospital in 2001 were
still with the hospital as of 2012. The attrition rate of the tenured doctors was negligible at 0.1 per cent
with almost 99 per cent retention and for the junior doctors the attrition rate was visible at 3 per cent, but
not high.

Dr. Hegde said, “We like to work here, as the environment is empowered and we have a lot of autonomy
and room to experiment.” Dr. Shetty believed in the “irrational” side of the doctors, referring to their
passion and commitment to learn, discover and experiment. He expanded the scope of the hospital to be
not just a cardiac care centre but also a teaching hospital. The senior doctors taught several programs
offered by the hospital and also took lessons one day per week to mentor and build talent pool at NH. Dr.
Hegde said, “We have the freedom to experiment, contribute and pursue our own interests, coupled with
the opportunity to reach out any time to Dr. Devi. We teach courses not just at NH but also share our
knowledge with students enrolled in the various programs at NH and in leading teaching hospitals in the
U.S.”

Dr. Sushil said, “He made it a point to meet up with anyone at any time and listen to their issues and
concerns.” M.S. Rao recollected his early days when he was admitted at Manipal Hospital for a surgery
and Dr. Shetty visited him and inquired about his health with the doctors at the location. Lakshmi Mani,
manager of NH’s charitable wing, said, “I knew I could approach Dr. Shetty anytime for anything that I
needed.”

Dr. Thimappa Hegde was handpicked by Dr. Shetty to set up the Department of Neurosurgery and
Sciences. Doctors later fondly recollected how Dr. Shetty took the time to ask about their families and
even patted them on the back for a job well done. M.S. Rao remembered a time when Dr. Shetty told him,
“You need to decide and do whatever is best for the hospital.” The motto at Narayana Hrudayalaya was
relentlessly enforced by Dr. Shetty, who made it imperative for all to treat the poor and the privileged
alike and with respect. This was also a time when Dr. Shetty set up a cross-subsidy model where 50 to 60
per cent of cases came from the lower socio-economic strata and 40 per cent came from the higher strata.

The next challenge was building scale and a larger patient base.

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THE STRUGGLE

Dr. Shetty travelled every weekend to Kolkata to meet his patients and on weekdays travelled back to
Bangalore, given that he had a large base of patients in Kolkata that he did not want to lose. However, this
not only got tiring but he soon realized that it was expensive. It was a huge hassle for the patients to travel
as well, and often they travelled only to realize that they did not need surgery. Thus, he set up a
telemedicine network at the Rabindranath Tagore Hospital in Kolkata.
Dr. Shetty jointly worked with the Indian Space Research Organization to set up the telemedicine
network, which greatly helped with reading scans and even assisted doctors remotely while they
conducted surgery. He was the first to introduce a telemedicine network in India and used it globally with
clinics in Cleveland and Mayo in the United States. Dr. Shetty was still looking at building and extending
his reach while keeping costs low and thus devised a micro-insurance plan known as the Yeshasvini
scheme, which resulted in government partnership and collaboration. He mobilized the government to
start social health insurance schemes, which led to a contribution of INR60 per year or INR5 per month
and, as of 2012 had coverage of 25,000 people since its inception.

News media called him “Demigod” and the scheme was a boon for the masses. Soon, in 2003, the
Karnataka Milk Federation reached out to him to endorse its cholesterol-free milk and he agreed to
endorse it only if in return the co-operative would encourage its members to participate in the micro-
insurance health plan, which had 1.6 million farmers in 2003–2004 and 11.2 million in 2009. The
cardholders of this scheme had access to over 280 private and public hospitals across the state. In 2005,
Narayana Hrudayalaya started a pilot program with ICICI Lombard, a private insurer, and Biocon
Foundation, led by Kiran Mazumdar Shaw, called Arogya Raksha Yojana. Arogya Raskha Yojana was
aimed at children and others in Karnataka and the slums of Kolkata who could not be reached by the
Yeshasvini scheme. This brought down the rate of surgery to INR 60,000, which was a 30 to 40 per cent
reduction, and so far 800 surgeries under this scheme had been conducted. Patients travelled from across
the world to Narayan Hrudayalaya — namely from Pakistan, Bangladesh, Africa and Iran — to get
treated there, as healthcare was not only prohibitively expensive but also of poor quality in their home
countries. Dr. Shetty had coordinators in countries such as Iran who helped patients get flights to
Bangalore and who helped of their own accord without being commissioned by Dr. Shetty or NH.

Dr. Shetty continued to increase coverage and patient reach and devised expansion plans. NH had
witnessed rapid expansion over the last few years. It had made its foray into 14 cities within India and
was also spreading its wings into the Cayman Islands and Africa. Business models such as wholly owned
subsidiaries, contract management and direct ownership helped increase the patient base. The hospitals
were equipped with state-of-the-art technology and infrastructure (see Exhibit 2).

The challenge Dr. Shetty faced yet again was how to attract leading surgeons and where they would come
from. How could they be persuaded to join him and stay? What would entice the doctors? How would he
offer quality surgeries at cost-effective rates? How would he retain and attract doctors when the external
market was paying huge salaries for their skills and competence? Ultimately, several factors led to a
retention rate of 95 per cent. All the senior and tenured doctors had stayed on from the time of NH’s
inception in 2001, and the attrition rate was less than 0.1 per cent. In the case of doctors joining from
other hospitals at the same level of seniority and work experience across India and from abroad and junior
doctors, the attrition rate was similar, while it was slightly higher for mid-level doctors, at 3 per cent, as
they were keen to learn at NH, build their profiles and explore other opportunities to build their careers.
Most of them were offered jobs at the 10 other hospitals that NH had. This helped NH retain doctors and
build its culture as it pursued aggressive growth plans. Dr. Shetty handpicked his team based on skills and
attitude, and personally assessed and spoke to the candidates no matter how junior or senior. A positive

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attitude, combined with the willingness to make a difference and reach out to the poor and needy, was
particularly appreciated, in addition to being highly experienced and learned in one’s own field of surgery
specialization. Attitude towards work and patients was particularly studied, and a non-hierarchical
mindset, which did not distinguish between the rich and poor and treated all with a humanist approach,
was the job clincher. Body language, posture, gestures and tone of voice were considered extremely
important for all interactions. This was the cultural core of the organization and was non-negotiable.
These qualities were carefully assessed through interactions and meetings with the human resources and
recruitment/selection team. A formal hiring process was put in place in 2008 as the NH hospitals grew. A
talent identification and development process was created in order to identity, recruit, nurture and retain
the best minds at NH. The junior doctors were trained at NH Bangalore, where they had the rare
opportunity to conduct and perform several kinds of treatments and surgeries, after which they were
rotated to work in the other NH hospitals across the country. This was a unique model that not only led to
the retention of talent but bolstered the sustainability of the leadership culture. The junior doctors were
not only grateful for the opportunity but also perceived this opportunity as recognition of their work at
NH. Dr. Shetty believed that the top surgeons had an irrational aspect that must be nurtured and
addressed. The doctors admitted that this had led to their tenured stays at NH.

Narayana Hrudayalaya had 12 to 15 per cent cardiac market share and conducted 30 per cent of cardiac
surgeries at INR75,000 while the industry average was close to INR150,000.10 NH hospitals performed
eight times more surgeries than India’s average hospital. NH ensured that high patient volume did not
compromise the quality of care. The Narayana Hrudayalaya group had 5,000 beds in India and aimed to
have 30,000 beds during the next five years to become one of the largest healthcare players in the
country.11 According to NH, it had 14 hospitals in 11 cities in India, namely in the cities of Hyderabad,
Jaipur, Kolkata and Durgapur and across the districts of Dharwad and Kolar in Karnataka. It also had
international locations in Malaysia and forthcoming projects in the Cayman Islands (see Exhibit 2). The
finances for 2011 looked sustainable and showed continued healthy indicators of growth (see Exhibit 3).

Dr. Shetty had made heart care affordable and had operated on hundreds of infants free of charge and yet
NH was highly profitable, had no debt and claimed a higher success rate than most U.S. hospitals.
Narayana Hrudayalaya had conducted 70,000 surgeries with an average of 30 complicated surgeries a
day. Dr. Shetty, who had pioneered the Yeshasvini micro-insurance scheme, said, “Over the last 12 years
I have spoken to farmers to pay INR 5 every month for medical insurance that would make them eligible
for all 1,650 surgeries.” Four million farmers have been covered under this scheme in Karnataka and on
witnessing this success the state governments of Andhra Pradesh and Tamil Nadu had also followed suit
with similar schemes.

For his outstanding contribution to society, Dr. Shetty was honoured with both the Padma Shri in 2004
and the Padma Bhushan in 2012 and several other prestigious awards (see Exhibit 4). Dr. Shetty’s
interviews on several leading shows on television both in India and abroad were available on YouTube
(see Exhibit 5). Dr. Shetty was spiritually inclined and began his day with invocations to the Lord. This
spiritual inclination was reflected in the design of NH, which was the first hospital to have four faiths of
worship represented — namely Christianity, Islam, Hinduism and Sikhism — at the same place within the
same structure, providing a source of solace to many. As of 2012, Dr. Shetty had conducted close to
15,000 surgeries and was the first cardiac surgeon in India to conduct neonatal cardiac surgery. With
close to 9,000 employees and with operations in 14 cities in India and countries abroad, how would
Narayana Hrudayalaya be able to sustain its caring and compassionate leadership in the future?

10
NH website, www.securities.com/Public/company-profile/IN/Narayana_Hrudayalaya_Pvt_Ltd_en_2445319.html, accessed
February 7, 2013.
11
Company internal documents.

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EXHIBIT 1: ORGANIZATIONAL STRUCTURE AT NH

Board and Chairman

Vice-chairman, MD and Group Group Head Audit

Chief Executive Officer M.S.Rao
Dr. A. Raghuvamshi

President & Group COO

Dr. Llyod Nazareth

Senior Vice-president
Chief Financial Chief Marketing
Strategy
Officer Officer
Viren Shetty
Sumanta Ray

Projects Business Development

Karthik R, Arun Mathur, Amit /International Projects/ Bidesh
Patel, Col. Baidya Paul, Vivek Rajagopal, Manu
Ravichandar

Source: Company’s internal documents.

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EXHIBIT 2: GROWTH OF NH HOSPITALS FROM 2001 TO 2012

Name of Hospital Location

Narayana Hrudayalaya Heart Hospital NH Health City, Bangalore
Narayana Hrudayalaya Multi-specialty Hospital & MS Cancer Centre NH Health City, Bangalore
Narayana Hrudayalaya Hospital Jaipur
Rabindranath Tagore International Institute of Cardiac Sciences E.M. Bypass, Kolkata
Narayana Hrudayalaya Malla Reddy Hospital Hyderabad
MSR Narayana Hrudayalaya MSR Nagar, Bangalore
SDM Narayana Hrudayalaya Dharwad
RL Jalappa Narayana Hrudayalaya Kolar
Brahmananda Narayana Hrudayalaya Jamshedpur
Rotary Narayana Hrudayalaya Salt Lake, Kolkata
Chinmaya Narayana Hrudayalaya Indiranagar, Bangalore
Narayana Hrudayalaya MMI Raipur
Narayana Hrudayalaya Hospital Ahmedabad
Sahyadri Narayana Hrudayalaya Hospital Shimoga

Upcoming Projects Location

Columbia Asia Narayana Hrudayalaya Heart Centre Kuala Lumpur, Malaysia
Narayana Hrudayalaya Surgical Hospital Mysore
Narayana Hrudayalaya Hospital Whitefield, Bangalore
Narayana Hrudayalaya IQ City Hospital Durgapur
Narayana Cayman University Medical Centre Cayman Islands
SRCC Children’s Hospital Mumbai

Source: Company’s internal documents.

EXHIBIT 3: NH FINANCIAL DATA FOR 2011

Company Information
Full name Status: Non-listed
Narayana Hrudayalaya Pvt Ltd Legal Form: Limited Liability Company
Headquarters Operational Status: Operational
258/A Bommasandra Industrial Area Anekal Taluk; Financial Auditors: BSR & Company (2012)
Bangalore; Karnataka; 560099 Incorporation Date: July 19, 2000
Tel: 91 (80) 27835000
Company Description
Healthcare Providers and Services
Company Analysis
According to the individual audited financial statement for the year 2011, total net operating revenues increased by
45.27%, from INR 3,273.4 million to INR 4,755.4 million. The operating result increased from INR 473 million to INR
618.6 million, which means a 30.78% change. The results of the period decreased 26.34%, reaching INR 227.6
million at the end of the period against INR 309 million the previous year. The return on equity (net income/total
equity) went from 6.63% to 4.66%, the return on assets (net income/total assets) went from 6.01% to 3.86%, and the
net profit margin (net income/net sales) went from 9.44% to 4.79% when compared to the same period the previous
year. The debt-to-equity ratio (total liabilities/equity) was 120.68%, compared to 110.25% the previous year. Finally,
the current ratio (current assets/current liabilities) went from 2.76 to 2.57 when compared to the previous year.

Source: Data taken from public website endorsed by Narayana Hrudayalaya, www.securities.com/Public/company-
profile/IN/Narayana_Hrudayalaya_Pvt_Ltd_en_2445319.html, accessed March 1, 2013.

This document is authorized for use only in Dr. Niti Shekhar 's Strategy Management at Indian Institute of Management - Jammu from Jan 2023 to Jun 2023.
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EXHIBIT 4: DR. SHETTY’S LIST OF RECOGNITIONS AND AWARDS

 Padma Bhushan Award for Medicine in 2012: Padma Bhushan is the second-highest civilian award
for distinguished service in any field in India and is conferred by the President of India in a special
function held at Rashtrapati Bhavan (President House)
 Entrepreneur of the Year in 2012 Economic Times Awards
 The Economist Innovation Awards in 2011 for “business process”
 Honorary Degree, University of Minnesota, 2011
 Schwab Foundation Award in 2005
 Dr. B.C. Roy Award in 2003
 Sir M. Visvesvaraya Memorial Award in 2003
 Karnataka Ratna Award in 2001
 Ernst & Young’s Entrepreneur of the Year in 2003
 Rajyotsava Award in 2002: This is the second-highest civilian honour in the state of Karnataka and is
given by the chief minister of Karnataka on November 1, the anniversary of the birth of the state
 CNN-IBN’s Indian of the Year in the public sector, 2012

Source: Authors’ interviews.

EXHIBIT 5: DR. SHETTY’S INTERVIEWS AND VIDEOS IN INDIA AND ABROAD ON YOUTUBE

 “The Unstoppable Indians: Dr Devi Shetty,” NDTV Profit, August 20, 2009,
www.youtube.com/watch?v=NfgrNCEN1RA, accessed March 1, 2013.
 “India’s Healthcare Challenge Kiran Mazumdar Shaw with Dr Devi Shetty Part 1,” Kiran Mazumdar-
Shaw, Bloomberg UTV, September 19, 2011, www.youtube.com/watch?v=yGmQDReeWhQ,
accessed March 1, 2013.
 “Indian Hospital - Episode 5,” Aljazeera English, May 31, 2012,
www.youtube.com/watch?v=Pvz2JGI-L6Q, accessed March 1, 2013.
 “Hard Talk: Dr. Devi Shetty-A Cardiac Surgeon with a Heart I,” BBC HARDtalk,
www.youtube.com/watch?v=ISA0ZvHp5MA, accessed March 1, 2013.
 “Satyamev Jayate - Does Healthcare Need Healing? - Rays of hope t (Part 3),” StarPlus, May 26,
2012, www.youtube.com/watch?v=F-XMe-Q5NSw, accessed March 1, 2013.

Source: Authors’ interviews.

This document is authorized for use only in Dr. Niti Shekhar 's Strategy Management at Indian Institute of Management - Jammu from Jan 2023 to Jun 2023.