Indian Healthcare Sector: An Attractive Destination For Private Equity Investment
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The Indian healthcare sector plays a major role in the Indian economy in terms of revenue and employment. The sector has been growing at a CAGR of 22% since 2016, generating employment for 4.7 million people directly. Further, the sector can generate 2.7 million additional jobs in India between 2017-22 -- over 500,000 new jobs per year.
There are several factors behind the growth of the Indian healthcare sector such as the aging population, a growing middle class, the rising proportion of lifestyle diseases, increased importance on public-private partnerships, and fast adoption of digital technologies, including telemedicine, etc.
The industry is growing at a tremendous pace attracting privateequity investment owing to its strengthening coverage, services, and
increasing expenditure by public and private players.
- · The hospital industry in India is witnessing a huge investor demand from both global as well as domestic investors. The hospital industry is expected to reach $132 bn by 2023 from $ 61.8 bn in 2017; growing at a CAGR of 16-17%.
- · The Indian Medical Tourism market is expected to grow from its current size of $3 bn to $7-8 bn by 2020
- · The diagnostics industry in India is currently valued at $4 bn. The share of organized sector is almost 25% in this segment.
- · The primary care industry is currently valued at $13 bn. The share of organized sector is practically negligible in this case.
- · Health insurance contributes 20% to the non-life insurance business, making it the 2nd largest portfolio. The gross direct premium income underwritten by health insurance grew 17.16% year-on-year to reach $6.87 Billion in FY20.
All these factors make India’s healthcare industry an attractive destination for private equity investment. Whether it is in the field of hospitals, pharmacy, or diagnostic, India offers an attractive investment opportunity. India also has the opportunity to boost domestic manufacturing of the pharmaceuticals, medical devices industry, with tremendous opportunities for expansion of diagnostic and pathology centers as well as miniaturized diagnostics.
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