Bain & Company published a report on Thursday revealing a significant boost in the Indian health and pharmaceutical sector. The sector received an impressive $5.5bn capital investment in 2023, a remarkable 25 percent jump from the previous year. This substantial increase in funding and the ambitious multibillion-dollar acquisition pledge made by global private equity executives from leading firms like Bain Capital, Blackstone Group, and KKR (Kohlberg Kravis Roberts & Co.) instil confidence in the sector’s growth and potential.
As per Bian, Private Equity and Venture Capitalist deal-making reduced by 35%, falling from $62 billion in 2022 to $39 billion in 2023. Moreover, according to them, this slowdown is due to various economic and global factors, such as ongoing political tension, globally high interest rates, and more. The drop was predominantly driven by a 60% reduction in VC funding. However, PE funding remained quite resilient. Amidst all these challenges, the healthcare sector received an all-time high investment, which is not coming down soon.
Various industry pioneers have also affirmed the industry’s growth. For instance, Prabhav Kashyap, a New Delhi-based Bain partner, said, “Assets are reaching the right scale . . . More are coming to the market.” And Bhavin Shah, private equity and deals leader at PwC India, mentioned, “Almost all hospitals of size have been invested in by private equity, and that trend is not coming down.”
Developments In The Health Care Sector
KKR (Kohlberg Kravis Roberts & Co.) made a significant move in the growing health sector in India. They bought the medical device manufacturer Healthium Medtech from Apax Partners. Further, Advent International promised to invest nearly $300mn in Apollo Hospitals’ digital and pharmacy arm.
What Next?
The increasing amount of money being invested in Indian healthcare highlights the growing difference between the well-developed private healthcare systems and the struggling condition of the country’s underfunded public hospitals. As Per Radhika Jain, an assistant professor of health economics at University College London, “PM Modi’s efforts to expand insurance to cover private care for poor Indians is not a panacea and is enormously complicated.” There we can anticipate some of the significant changes in the government policies for state-funded hospitals.
