Big money is making a beeline for Indian hospitals

India’s hospital sector is witnessing an unprecedented investment boom, with private equity (PE) and foreign investors actively acquiring assets amid a wave of consolidation. Initial Public Offering (IPO) bound Manipal Health Enterprises has reportedly bid Rs. 6,838 crore (US$ 796.9 million) to acquire Sahyadri Hospitals, with Blackstone, Fortis Healthcare (backed by IHH Healthcare), and EQT Partners also in contention. Owned by Ontario Teachers’ Pension Plan since 2022, Sahyadri operates 11 facilities with 1,300 beds across Maharashtra. This race highlights a wider trend: India's hospital ecosystem, especially smaller and regional chains, is attracting deep-pocketed investors due to robust growth potential in tier II and tier III cities.
Between 2022 and 2024, hospitals in India attracted Rs. 7,246 crore (US$ 844 million) via Initial Public Offerings, Rs. 39,918 crore (US$ 4.65 billion) in PE, and Rs. 27,459 crore (US$ 3.2 billion) through Foreign Direct Investment (FDI). PE funds are shifting focus from multi-speciality to high-return single-speciality verticals like oncology, nephrology, In Vitro Fertilization (IVF), and maternity care. Notable deals include Temasek’s Rs. 17,162 crore (US$ 2 billion) in Manipal Health, and Kohlberg Kravis Roberts’s (KKR) Rs. 3,432 crore (US$ 400 million) stake in Healthcare Global. Hospitals accounted for 50% of healthcare foreign direct investment (FDI) in FY24, up from 24% in FY21. With increasing lifestyle diseases, low bed density (16 per 10,000 people), and rising insurance penetration, India's hospital market, currently valued at Rs. 3,50,000 crore (US$ 40.79 billion) is expected to grow at a 12% Compound Annual Growth Rate (CAGR) over the next three years. Prominent Indian corporates such as the Bajaj Group and Reliance Industries are also entering the sector, which is buoyed by policy support for medical tourism and demand from underserved regions.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.