Medi Assist Healthcare: We are streamlining our business structure, says CEO, Satish Gidugu

Beyond the borders of India, Medi Assist has a presence through Mayfair in the UK, which will remain the sole international arm for now.

Medi Assist Healthcare Services, which is currently undergoing the listing process, aims to simplify its business structure. Established in 2002, the company's business is conducted through Medi Assist Healthcare Services Ltd, the holding company that is proposed to be listed, which operates through nine subsidiaries, of which four are direct subsidiaries and five are indirect.

The company’s direct subsidiaries include Raksha Health Insurance TPA Pvt Ltd, Medvantage Insurance TPA Private Ltd, International Healthcare Management Services, Mayfair Consultancy Services India, and Mayfair We Care Ltd, UK.

According to Satish Gidugu, Chief Executive Officer (CEO), Medi Assist, post-simplification, there will be two major business segments. The first will be the domestic third-party administrator (TPA) business, led by Medi Assist TPA. In this domain, the company has acquired two other TPAs, which are currently in the process of amalgamation. This process typically takes about a year or so to complete. Once finalised, there will be a unified TPA entity providing services in India, added the CEO in the exclusive conversation with Moneycontrol.

Beyond the borders of India, the company has a presence through Mayfair in the UK, which will remain the sole international arm for now.

Also read: Medi Assist Healthcare IPO: Should you subscribe to Rs 1,171.58 crore issue?

Timeline and financial implications of the amalgamation

Gidugu said that the company anticipates the entire process of mergers to be completed in less than a year. On the financial impact and synergies of the mergers, he emphasised that they expect to maintain their original margin profiles. Gidugu pointed out that much of the industry currently operates at lower margins, and with the acquisitions and consolidation, the company doesn't foresee any additional impact on the margins.

Also Read: Medi Assist Healthcare IPO: Issue subscribed 2 times, retail portion booked 2.1x on final day

Margin profile

It is worth highlighting that the company’s margins have historically been higher than those of the industry. He said that compared to the industry, the company's employee costs are lower and technology integration is better.

Notably, the employee benefit cost for Medi Assist Healthcare Services stands at approximately 40 percent of total revenues. The cost is way lower than industry standards.

On technology integration, he said that after acquiring businesses in India, the company systematically shifts them to their technology platform and operating framework. These unique practices will translate into positive outcomes for the company, he emphasised.