Hospitals in India attracted a significant US$ 1.5 billion (Rs. 12,708 crore) in foreign direct investment (FDI) in FY23, accounting for 50% of all healthcare FDI. This marked a notable increase from 24% in FY21 and 43% in FY20, underscoring the growing importance of hospitals in drawing foreign investment. While the pharmaceuticals sector has traditionally been a key focus for investors, the spotlight is shifting towards hospitals and diagnostics, particularly post-COVID-19. Large hospital chains, including Manipal and Max, have seen major buyouts. Aster DM Healthcare recently announced its merger with Quality Care India. According to Global Health Industries Advisory Leader at PwC India, Mr. Sujay Shetty, the size of the Indian market, underserved rural areas, high disease burden, and public and private insurance growth will continue to drive sector growth.
The sector’s expansion is also highlighted by Temasek’s US$ 2 billion (Rs. 16,944 crore) acquisition of a 41% stake in Manipal Hospitals, valued at US$ 4.8 billion (Rs. 40,666 crore). Additionally, there has been a surge in primary market transactions, including six hospital IPOs, attracting private equity investors. Max Healthcare’s CMD, Mr. Abhay Soi, emphasised that investment in quality healthcare is vital for India’s goal of a US$ 5 trillion (Rs. 4,23,60,000 crore) economy. Being capital-intensive and not a major dividend-payer, the hospital sector reinvests its profits into infrastructure. Max, for example, is investing over US$ 590.2 million (Rs. 5,000 crore) to double its capacity over the next three years. Analysts predict ten listed Indian hospital firms will increase bed capacity by 47% between FY24 and FY27. In contrast, seven new large hospital chains raised US$ 424.9 million (Rs. 3,600 crore) through IPOs and placements, contributing to the sector’s growth.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.