In 2024, the merger of Aster DM Healthcare and Blackstone-backed Quality Care India Limited (QCIL), valued at $5.08 billion, spawned Aster DM Quality Care, the third-largest hospital chain in India.
New Delhi: The health sector in India is witnessing massive investment, largely from global private equity (PE) firms and Indian corporate giants. Recently, the Adani Group pledged to invest Rs 6,000 crore (USD 6.93 billion) to set up two Adani Health Cities (AHC) in Mumbai and Ahmedabad. The health cities will be built in collaboration with the storied Mayo Clinic, incorporating multi-specialty hospitals, medical colleges, and advanced research facilities.
The Bajaj group has also earmarked Rs 10,000 crore (USD 11.53 billion) to set up a chain of hospitals in India, according to Bloomberg. The Tata Group is also expanding its hospital portfolio with a Rs 500 crore investment in Mumbai’s Breach Candy Hospital. It is important to note that the TATA group also operates the Tata Memorial Centre and an animal hospital in Mumbai. Reliance Industries Ltd (RIL) acquired Karkinos Healthcare, an oncology-focused healthcare platform, for Rs 375 crore in December last year.
“The growing demand for quality healthcare in India, driven by demographic shifts and evolving medical needs, has led to a surge in investment across the sector,” said Bhanu Prakash Kalmath S J, Partner, Grant Thornton Bharat.
As per the Grant Thornton Bharat Annual Deal Tracker, in 2024, India’s healthcare sector witnessed a record USD 9.96 billion worth of mergers and acquisitions, three times higher than the previous year. Hospitals mopped up 44 percent of all the deals translating into USD 5.56 billion.
Grant Thornton Bharat data shows that PE investment in Indian hospitals peaked in 2023 at a record $3.79 billion but slid to $504.09 million last year. The 2023 deals included Blackstone’s acquisition of Care Hospitals and KIMS in a deal worth over $1 billion and the acquisition of Manipal Hospitals by Tamaesk for$2 billion. In the same year, BPEA EQT bought Indira IVF for $657 million.
In 2024, the merger of Aster DM Healthcare and Blackstone-backed Quality Care India Limited (QCIL), valued at $5.08 billion, spawned Aster DM Quality Care, the third-largest hospital chain in India.
What Makes Private Hospitals Attractive?
Talking to Outlook Business, analysts explained that there are two key drivers: rising insurance penetration and lack of healthcare infrastructure.
Since Covid-19, insurance penetration in the country has grown rapidly, leading to a rise in demand for quality healthcare services, said Dheeresh Pathak, Fund Manager for WhiteOak Capital AMC. “Earlier, people were fine with ward beds. Now, with insurance, they insist on a private room and ask the hospital for the best coverage their policy offers,” he said.
According to a study by Bajaj Finserv, India remains significantly underinsured compared to developed nations. However, the gap is gradually closing. Between FY20 and FY24, health insurance premium collections rose from USD 7.04 billion to USD 13.07 billion.
