Private equity
firms in India are growing in health care, becoming a
larger source of capital. The private sector has emerged as a vibrant force in
India's healthcare industry, giving it national and international repute. It
accounts for almost 74% of the country’s total healthcare expenditure.
The hospital industry accounts for 80 percent of the total
healthcare market in India, and in the last five years has seen huge investor
demand – from both global as well as domestic investors. By FY2022, India’s
hospital industry is expected to reach US$132.84 billion from US$61.8 billion
in FY2017, growing at a compound annual growth rate (CAGR) of 16 to 17 percent.
The Indian medical tourism market, meanwhile, is growing at 18 percent y-o-y to
reach US$9 billion by 2020. The government also plans to increase budget
allocation for public health spending to 2.5 percent of the country’s GDP by
2025.
Private equity is a primary source of capital for
innovation, especially for startups. Private equity funding is accelerating
health care in India — one of the few sectors with stable deal activity last
year despite economic uncertainty during the pandemic. Digital health companies
are turning to private equity firms as their main source of capital. Eight Indian digital health companies
received VC funding in Q3 2020 totaling $40 million while global VC funding for
digital health companies in the first nine months (9M, January-September) of
2020 broke all previous 9M funding records, bringing in $10.3 billion.
There are tremendous opportunities for private equity funds
to combine highly fragmented and high-margin businesses within healthcare
services. Top private equity firms like
Quadria Capital can provide exposure to innovative companies developing
next-generation therapies. Further, private equity investments “have accelerated
rapidly in the life science sector.”
Given its large population and relatively lower
costs, the hospital industry in India has attracted massive investments
from top private equity firms in India –
to fund healthcare delivery, advance technology, and medical care, and expand
market reach. This is further facilitated by the poor coverage of credible
public healthcare institutions and services.
Comments
Post a Comment