Why Private Equity Funds Are Key to India’s Healthcare Growth Story?

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  India’s healthcare sector is at a crossroads — caught between soaring demand and limited infrastructure. Urban hospitals are bursting at the seams, while rural regions still struggle with basic access to care. Amid these challenges, one powerful force is quietly but steadily reshaping the system: private equity funds .   In recent years, India has witnessed a surge in healthcare innovation — from telemedicine platforms and diagnostics startups to multi-specialty hospital chains. But innovation needs more than just good ideas; it needs capital, strategic direction, and long-term vision. That’s exactly where private equity investment in India has stepped in — and is now driving real, measurable impact.   Let’s explore why equity investment in India , especially through PE firms, has become the backbone of the country’s healthcare transformation.     The Rising Demand Meets Infrastructure Gaps   India is home to over 1.4 billion people, but the ratio of...
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Private Equity Firms: Changing the Landscape of Indian Healthcare Sector

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The fact is, as we are living longer with an aging population, there is a growing pervasiveness of chronic diseases due to lifestyle changes and pollution; and populations are getting wealthier and want to use their disposable incomes to get access to the best treatments.

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So long as our bodies continue to survive sickness and fail, there will always be a need to continue innovating to find better solutions. Notwithstanding economic and regulatory pressures, there is an opportunity for the industry to continue furthering revenues through the discovery of new treatments or devices that physicians and patients find valuable. Encouraged by this logic and coupled with the low-interest rates and buoyant fundraising environment, private equity firms have been drawn to healthcare.

Particularly in periods of economic inequality, investors have turned to healthcare somewhat in the same way that they have turned to precious metals or defensive industries. If one looks at the performing funds in the past few years, the best performing specialist funds were those that exclusively invested in the biotech and healthcare sector.

Healthcare deal value surged in 2020, even with valuations reaching an all-time high, some believe that we will continue at this level of M&A activity in 2021 as well. One of the reasons for the high valuation is that competition has become crowded. Healthcare private equity funds now face competition not just from strategic buyers but also new categories of players that have entered the space; these include generalist private equity investors, pension funds, sovereign wealth funds, etc. There is still scope for further private equity to penetrate the healthcare market, particularly in India where healthcare has lagged behind some other sector groups.

The dynamics are changing, and we are finding that private equity is increasingly proving that it does have the sector understanding and confidence to outbid strategic players. Funds are taking a greater risk appetite to find broader ways of deploying capital, including assets that come with high exposure to reimbursement risk.

Location: Level 1-2, Crescent Building Lado Sarai, Chatri Wala Kuan, Mehrauli, New Delhi, Delhi 110030, India

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