New Delhi – India’s healthcare and pharma sector has witnessed significant investment activity, recording 594 merger and acquisition (M&A) and private equity (PE) transactions worth over $30 billion between 2022 and 2024, according to a joint report by Grant Thornton Bharat and the Association of Healthcare Providers of India (AHPI).
Hospitals Emerge as Key Investment Destination
Hospitals accounted for a major share of investments, with M&A deals worth $6.74 billion and $4.96 billion from private equity, making up 40% and 38% of the total transactions, respectively. Additionally, hospitals raised $466 million through initial public offerings (IPOs).
Investor Focus on Specialty Segments
The report highlighted a growing investor interest in high-demand specialties such as oncology, cardiology, and mother-and-child care, with valuation multiples ranging between 20 and 30 times EBITDA. Single-specialty hospital segments like nephrology, IVF, and oncology attracted $1.4 billion in PE investments due to their scalable, asset-light models.
Foreign Direct Investment and Market Trends
Foreign direct investment (FDI) in healthcare and diagnostics reached $3.2 billion, with hospitals and diagnostic players generating $931.46 million in inflows in FY24-25 until September. The sector is undergoing consolidation, with multispecialty hospitals integrating technology to enhance operations and market presence.
Challenges and Future Outlook
Despite rapid growth, challenges remain, including the urban-rural healthcare divide. While 60% of hospital beds are in metro cities, 70% of India’s population resides in non-metro regions. Rising treatment costs and high out-of-pocket expenses call for innovative financing models, rural healthcare expansion, and digital health adoption.
Experts believe that shifting demographics, increasing chronic diseases, and a focus on quality healthcare will continue to drive investments in the sector, making India a global healthcare hub.
