MUMBAI – According to a recent report by Bain Capital, India has emerged as a significant contributor, representing nearly 30 percent of the Asia-Pacific region’s global healthcare deal activity in 2023. The report identifies four key factors driving the surge in investment opportunities within India’s healthcare sector.
The factors highlighted in the report include the country’s resilient economic growth, a government fostering a business-friendly environment, a matured pharmaceutical manufacturing landscape, and an expanding middle class willing to invest in quality healthcare. In 2023, India witnessed 22 healthcare deals totaling $4.6 billion, slightly lower than the $4.7 billion recorded in the previous year.
Key exits, such as TPG’s sale of a controlling stake in Care Hospitals to Blackstone, have yielded substantial returns for investors. This success has increased the confidence of global private equity investors, leading to more substantial capital investments in India and intensifying market competition, the report notes.
The landscape is witnessing a trend where an increasing number of transactions are structured as controlling deals, indicative of a diminishing perceived risk associated with significant investments in India. Temasek, for instance, currently holds a 59 percent stake in Manipal Hospitals, the country’s second-largest hospital chain by the number of beds.
India’s willingness to pay for quality healthcare has played a pivotal role in this growth. Government health expenditures have risen notably over the past decade, from approximately 29 percent of total health expenditure in 2014–15 to around 39 percent in 2021–22, as per S&P Global data. The report anticipates further growth in healthcare spending.
India’s reputation as a robust pharmaceutical manufacturing hub has also contributed to the surge in healthcare deals. The country’s crucial role in global vaccine supply during the COVID-19 pandemic and initiatives like the Production Linkage Incentive program underscore strong government support for the sector. For instance, Advent International acquired a majority stake in contract drug manufacturing organization Suven Pharma in September 2023.
Furthermore, digital healthcare services, online fitness platforms, and insurtech have garnered attention among Indian consumers. Despite a slight slowdown in deal-making in the digital health sector, the report emphasizes the enduring fundamentals, particularly the digitally inclined young population, supporting Indian companies operating at the intersection of healthcare and technology.
