Private Equity Firms in India Drive Growth in Healthcare & MedTech

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  India’s healthcare sector is witnessing a major transformation, fueled by increasing investments from private equity firms in India . The country, one of the fastest-growing healthcare markets in the world, is attracting substantial capital, particularly in medical technology (MedTech). In 2024, private equity investment in India saw a shift, with funding in MedTech jumping nearly fivefold to $1.2 billion, while investments in hospitals and clinics declined significantly. This shift highlights a growing emphasis on technology, innovation, and improved healthcare infrastructure. The Rise of Private Equity in Indian Healthcare Private equity (PE) and venture capital (VC) firms are showing strong confidence in private equity India , with healthcare emerging as a key sector for investment. The number of PE/VC deals in healthcare surged from 62 in 2023 to 84 in 2024, indicating rising investor interest. However, there is a noticeable change in where the money is going. While hospi...

Private Equity Investment in Healthcare: Is It a Viable Option?

Healthcare is one of the largest sectors in India, with a market size of $194 billion in 2020. The Indian healthcare sector, which is supposed to reach $372 billion by 2022, is growing fast due to increasing coverage, the extent of services, expenditure by public and private players, and the growing demand for quality healthcare. Services offered by the Indian healthcare sector are cost-competitive compared to their counterparts in developed nations.

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The public healthcare system in India comprises primary and secondary centers. India’s private healthcare sector is witnessing rapid growth due to the availability of quality treatment compared to public healthcare services. The low spending in public healthcare has made the private sector fill the gap in healthcare services. Sensing the need for substantial investment in healthcare, the government laid down policies to attract private equity firms in the Indian healthcare sector.

Substantial growth in demand for quality healthcare and lack of funds to deliver it by expanding facilities, buying equipment, etc., obliges sourcing the funds through PE investments. PE investors are attracted to invest in Indian hospitals. Factors that contribute to private equity investment in the Indian healthcare sector are:

·         Opportunity to generate higher returns while improving portfolio diversification

·         Having a significant controlling stake

·         High patient footfalls in the target hospitals

·         Potential to expand hospital networks into smaller cities

Private equity investments in hospitals and other healthcare services, especially medical device manufacturers, medical diagnostics companies, and e-Health set-ups, result in significant value addition for private equity firms in India. One visible positive impact of these investments is the creation of the required infrastructure. Apart from helping increase physical capacity in the healthcare sector, private equity investment can also help raise the standards and quality of healthcare services and create employment opportunities, benefiting the healthcare sector and the economy.

Overall, private equity investments are a significant boost to the healthcare sector. Apart from providing efficiency, cost-effectiveness, and well-grounded patient services, top private equity firms in India are transforming the healthcare industry.

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