New Delhi, India – Private equity and venture capital investors are increasingly eyeing the Indian healthcare sector, drawn by the growing expenditure on medical services in the country with the largest population in the world. This surge in investment shines a beacon of hope in an otherwise subdued landscape of overall deal activity.
According to a report by Bain & Company, investments in India’s health and pharmaceutical industry reached approximately $5.5 billion in 2023, marking a 25% increase from the previous year. Global private equity players like Bain Capital, Blackstone Group, and KKR co-founder Henry Kravis have shown keen interest in India’s economic prospects, committing to multibillion-dollar acquisitions.
Notable recent acquisitions include KKR’s purchase of Healthium Medtech from Apax Partners and Advent International’s investment of nearly $300 million in a digital and pharmacy segment of Apollo Hospitals, the largest corporate healthcare chain in India. This trend of private equity flowing into healthcare remains robust as rising incomes and a rise in lifestyle diseases like diabetes propel the industry’s growth.
The influx of funds into Indian healthcare underscores the stark disparity between the burgeoning private healthcare network and the inadequacy of public hospitals suffering from chronic underfunding and neglect. Despite the Indian government’s efforts to enhance health services, including introducing public insurance policies for millions of low-income households, challenges persist due to limited government spending on healthcare.
While the private sector continues to attract the majority of healthcare visits in India, particularly among poor households, issues like insufficient infrastructure, a shortage of medical professionals, and a lack of trust in public facilities persist. The government’s initiative to expand insurance coverage for private care for the disadvantaged is a step forward, but experts caution that more comprehensive measures are necessary to ensure widespread access to quality and affordable healthcare.
Amid a 35% decline in overall private dealmaking in India in 2023, the healthcare sector stands out as a beacon of resilience, attracting a significant share of investment as global interests and political tensions influence investment patterns. Despite a cautious approach toward capital deployment this year, India’s increasing share of private investment in Asia signals a promising outlook for future deals amid a backdrop of uncertainty in global markets.