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Caspian Debt aims to double its exposure to healthcare companies this year

Healthcare

Over the last seven years, Caspian Debt, a leading provider of debt funding to start-ups and social enterprises, has provided loans of over INR 2,000 Crores to 160 companies working in Healthcare, Small Business Finance, food and agriculture, education, Information, and communication technology, for development. It has provided loans worth INR 90 Crores to 16 healthcare companies across India.

Companies in the Caspian Debt portfolio operate across the preventive and curative spectrum with a focus on eye, dental, and kidney care and diagnostics. Eighty percent of them had experienced a dip in their business due to pandemic related declines in patients and supply chain disruptions. Post-lockdown, despite a brief rise in demand, the business did not return to normal because persistent fears of COVID-19 prevented patients from accessing elective healthcare. To support healthcare businesses in this market environment, Caspian Debt facilitated their access to an Emergency Credit Line Guarantee Scheme (ECLGS), which provided immediate liquidity for them to continue their operations.

The needs of the pandemic, however, have resulted in increased demand for some companies, like PLUSS Advanced Systems, which manufactures material used in vaccine delivery, and Collateral Medical (ColMed), the country’s leading medical device marketing and distribution company. These companies faced an urgent need for loans to expand their COVID-19 related services. When PLUSS Advanced System partnered with Dr. Reddy’s Laboratories, a leading multinational pharmaceutical company, to deliver vaccines, Caspian Debt sanctioned a loan of INR 7 Cr to support working capital needs.

ColMed faced unprecedented demand for oxygen cylinders and concentrators during the second wave of the pandemic, requiring more working capital than usual. To address the demand, Caspian Debt immediately sanctioned a new funding line of INR 2 Cr and collaborated with the U.S. Agency for International Development (USAID)-supported SAMRIDH Healthcare Blended Finance Facility, which made an additional INR 1 Cr available. With timely debt infusion from Caspian Debt and SAMRIDH, this online medical device company was able to import 7,000 oxygen concentrators and make them available for people in need.

Caspian Debt’s collaboration, as a financing partner, with the USAID-supported SAMRIDH Healthcare Blended Financing Facility, represents a significant step in their efforts to expand support for healthcare companies. Through this collaboration, Caspian Debt and SAMRIDH aim to support the expansion of health solutions focused on health infrastructure, supply chain management for COVID-19 medicines and vaccines, training for healthcare workers, and other community-based activities to address the COVID-19 pandemic.  Established by USAID in 2020, the SAMRIDH Healthcare Blended Financing Facility combines public and philanthropic funds with commercial capital to support market-based healthcare solutions. SAMRIDH has already mobilized a capital pool of more than INR 740 Cr and is leveraging this fund to offer both grant and debt financing to healthcare enterprises and innovators. Caspian Debt has, in principle, committed up to INR 35 Cr to SAMRIDH’s commercial debt investment pool.

On the funding and SAMRIDH Partnership, Avishek Gupta, Investment Director, Caspian Debt said, “The pandemic has seen a huge demand for oxygen concentrators. With lakhs of people becoming critically ill and facing a shortage in supply of vaccines, oxygen cylinders or concentrators, we swung into action to provide them timely access to working capital as soon as we came to know that PLUSS and ColMed are playing a critical role in filling this gap. We were encouraged by our partnership with SAMRIDH Blended Health Care Facility which will help us to provide as much support as possible to Healthcare companies during these difficult times.”

Reflecting on the need for commercial investments in healthcare, Dr. Ashish Mendhi, Project Lead, SAMRIDH Healthcare Blended Financing Facility said, “Development financing, by itself, is not sufficient to address the diversity and scale of India’s healthcare challenges, which is why it is critical to unlocking other sources of capital. We welcome the opportunity to partner with Caspian Debt. This collaboration will help us advance SAMRIDH’s efforts to leverage philanthropic funding to channel private sector investments in sustainable healthcare businesses.

Nikhilesh Tiwari, Founder & Director ColMed said, “COVID-19 posed a huge challenge to us in terms of cash flow management. Not only were the collections reduced, but there was also a tremendous shift in demand. This compounded our cash flow problems. Caspian Debt has been very supportive in providing us with an extension to the current credit lines that helped in easing the cash flow situation and allowed us to adapt to the new product mix. Caspian Debt also helped us avail funding from SAMRIDH Blended Finance Facility. We have been working with Caspian Debt for over 5 years now and so far, ColMed so far has availed loans of INR 9 Cr. I really appreciate the transparency with which they work allowing a collaborative approach towards planning and finance management. One unique thing about them is that they take challenges faced by companies as their own problems and try to come up with solutions such as blended finance to address the need of the hour.”

Caspian Debt expects to continue its focus on the healthcare sector over the next year as companies pivot their products and business models to address COVID-19 and more patients seek care for Non-Communicable-Diseases that were neglected during the pandemic. Caspian Debt will continue to support enterprises working towards improvement in the accessibility of quality preventive and curative healthcare through innovations in teleconsultation and point-of-care diagnostics, and infrastructure expansion in Tier Y and Z geographies and is lookingto double its exposure in the health care sector in the coming year.

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