Indian healthcare and pharmaceuticals deals value rose 298% year-on-year (y-o-y) in July-September: Report by Grant Thornton Bharat Pharma and Healthcare Deal-tracker

The deals in the healthcare and pharmaceuticals sector in India jumped 298% in the July-September period of 2023 as compared to the same quarter of the previous year, says a report by Grant Thornton Bharat Pharma and Healthcare Deal-tracker.

Nirma’s acquisition of Glenmark Lifesciences for US$ 689 million was the biggest deal of the period. The other deal which crossed US$ 100 million was the acquisition of AMRI Hospitals Limited by Manipal Health Enterprises Limited for US$ 280 million.

Active Pharmaceutical Ingredient (API) and Contract Development and Manufacturing Organisation (CDMO) in the life sciences and single specialty in healthcare sectors emerged as focus segments with increased investor interest.

The quarter witnessed 26 deals totaling US$ 2.7 billion. This shows a decrease of 26% and 14% in deal volumes and values, respectively, compared with the April-June quarter.

According to Mr. Bhanu Prakash Kalmath, Partner and Healthcare Sector Leader of Grant Thornton Bharat, though the deal volumes in healthcare may remain subdued but the growth drivers of sector’s, such as increasing healthcare demand, technology adoption, and government support are likely to persist.

In cross-border space, there has been a decline in the deal volumes. There has been only 1 deal in the inbound space in the quarter in review, Gleneagles Development’s acquisition of Ravindranath GE Medical Associates for US$ 90 million.

With 18 acquisitions totalling US$ 1.4 billion, the Private Equity (PE) landscape saw the lowest quarterly volumes in the previous 3 years. This quarter demonstrated a noteworthy 147% growth in values compared to the July-September period in 2022, even if deal values and volumes decreased from the previous quarter.

With significant investments like Baring Private Equity Asia (BPEA) EQT’s US$ 657 million infusion into Indira IVF Hospital Private Limited, Quadria Capital's investment in Maxivision Super Speciality Eye Hospital, and Asia Healthcare Holdings acquisition of the majority stake in Asian Institute of Nephrology and Urology, single speciality hospitals have become a particularly appealing sector for investors.

In the July-September quarter, the total value of pharmaceutical and healthcare Initial Public Offerings (IPOs) in India was US$ 379 million, with Concord Biotech raising US$ 189 million of that total.

The report also mentioned that investors interest in India’s healthcare sector have been significantly diverse in the quarter. While hospitals continued to captivate investor’s attention, the health-tech segment saw a surge in deal volumes, reflecting a sustained trend from previous quarters. The sector recorded 12 deals, with a standout investment involving a consortium of major players in Pharmeasy.

It further stated that Single Speciality hospitals are significantly attractive to investors in India, with PE fund BPEA EQT investing US$ 657 million in Indira IVF, Quadria Capital investing US$ 159 million in Maxivision Super Speciality Eye Hospital, Asian healthcare investing US$ 73 million in Asian Institute of Nephrology and Urology and TPG Growth, and Temasek investing in Dr. Agrawal’s Healthcare, valuing US$ 80 million.

There is an obvious tendency towards consolidation as larger corporations look to buy smaller, more specialised ones. There is a desire to extend influence into the regional healthcare sector. Examples of this include Manipal Health's acquisition of the majority of AMRI Hospitals Limited and India Resurgence Fund's investment in Ivy Health & Life Sciences Private Limited.

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