Kamath said he recently had dinner with Dr Devi Shetty, a renowned Indian cardiac surgeon who founded Narayana Health. “For those who don’t know him, he is the guy who figured out how to do open heart surgery for a few hundred dollars when the same procedure costs a bomb in the US. Narayana has 18,000 beds across India, and if you ask most middle-class people in Bangalore about it, they will speak highly of it,” Kamath said.
After his interaction, the Zerodha CEO kept thinking about one thing. “Narayana’s market cap is around Rs 38,000 crore. Now compare that to pretty much any half-decent financial services business in India, and it’ll be valued more than that, including Zerodha. A brokerage, worth more than a hospital chain, that has probably saved hundreds of thousands of lives,” he wrote.
Kamath acknowledged that several metrics, including margins, capex, asset-light vs asset-heavy models, and more, explain this valuation gap. However, he said that we have built a “strange world” where businesses closest to money get valued the highest, and the ones doing the hard and essential things get priced like “boring” utilities.
“A hospital carries physical infrastructure, enormous liability, thin margins and the actual weight of keeping people alive. And somehow that’s worth less than a platform for buying and selling stocks. I don’t have a clean take on this. All of this just felt odd,” he wrote.
Dr Devi Shetty founded Narayana Health (formerly Narayana Hrudayalaya) in Bangalore in 2000. He has conducted over 1.2 lakh heart surgeries, with a significant focus on pediatric cases. He was awarded the Padma Shri in 2004, the fourth highest civilian award. Later in 2012, the government awarded him the Padma Bhushan, the third-highest civilian award, for his contribution to the field of affordable healthcare.
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