Private Equity Investment in Healthcare: Is It a Viable Option?
- Get link
- X
- Other Apps
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.
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.
- Get link
- X
- Other Apps
Comments
Post a Comment