New Delhi: Between 2022 and 2024, Indian hospitals attracted significant investments, becoming a hot spot for investors. Private Equity (PE) brought in $4.96 billion, while Foreign Direct Investment (FDI) accounted for $3.2 billion.
A report by Grant Thornton Bharat, in collaboration with the Association of Healthcare Providers of India (AHPI), noted that hospitals engaged in mergers and acquisitions (M&A) worth $6.74 billion during this period and raised $466 million through Initial Public Offerings (IPOs).
The report analyzed 594 M&A and private equity transactions and emphasized the need for hospitals to explore various funding sources. These include equity and debt financing, FDI, and public-private partnerships to support growth.
Top investments in the healthcare sector included:
- Temasek Holdings invested $2 billion in Manipal Health in 2023.
- BPEA EQT put in $656 million into Indira IVF in 2023.
- Blackstone Group contributed $591.1 million to Quality Care in 2023.
Overall, FDI in healthcare and diagnostics reached $3.2 billion from 2022 to 2024. Since April 2000, these inflows total $11.19 billion, mainly targeting hospitals and specialized care facilities. In the fiscal year 2024-2025, hospitals and diagnostics organizations generated another $931.46 million through FDI.
The report highlighted that areas like nephrology, IVF, and oncology saw PE investments of $1.4 billion over the two years. Factors like ageing populations and the growth of health insurance are driving investor interest.
Bhanu Prakash Kalmath S J, a partner at Grant Thornton Bharat, noted that hospital efficiency and value-based care are crucial. He emphasized that clinical excellence should remain a priority while optimizing financial metrics like patient volume and cost management.
Programs like PMJAY provide insurance to over 500 million people, boosting demand for hospital services. Despite this growth, Dr. Girdhar Gyani, Director General of AHPI, pointed out that Tier 2 and Tier 3 cities are lacking, holding less than 30% of India’s hospital infrastructure while needing quality healthcare.
Dr. Gyani also addressed the shortage of healthcare professionals, stating there’s a deficit of 1.54 million doctors and 2.4 million nurses in India. Disparities exist, with most hospital beds located in metro areas, even though 70% of the population lives in non-metro regions.
He highlighted the rising costs of medical treatments and emphasized the need for innovative financing models. There’s a call for enhanced medical training, rural healthcare support, and the adoption of digital health solutions to bridge these gaps.
To sum it up, the Indian healthcare sector is booming with investments, but challenges like infrastructure gaps and healthcare professional shortages still need to be addressed for more equitable access.
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Indian hospitals investment, private equity investors, healthcare M&A 2022-2024, health insurance coverage India, investment in healthcare, medical treatment costs India, healthcare infrastructure challenges, value-based care models, Grant Thornton Bharat
