Key Takeaways
- • A study published in BMC Health Services Research mapped private equity investments in India's health sector over 18 years and found deals concentrated in multispecialty hospitals in the urbanised southern and western states, with rural and underserved regions attracting little or no investment.
- • Activity accelerated after 2020 and peaked in 2023 with 18 deals, mirroring post-pandemic global trends in which low interest rates and abundant dry powder favoured healthcare's relatively stable revenues.
- • Karnataka led with 13 deals, followed by 10 each in Maharashtra and Telangana, while Gujarat had six and Keralam and Haryana five each; northern and eastern states saw minimal or no investment.
- • Foreign PE firms solely financed 47 of the acquisitions (67.1%), while 18 were backed exclusively by Indian investors.
- • Among 25 observed PE exits, secondary sales to other PE firms were the most common route at 64%, with an average holding period of 5.1 years; 45 hospital groups (64.3%) remained under their original PE ownership.
Summary
A mapping of private equity investment in India's health sector over the past 18 years, reported by The Times of India and based on a study published in BMC Health Services Research, shows that capital has flowed overwhelmingly to multispecialty hospitals in the urbanised southern and western states. Vast rural and underserved regions received little or no investment, according to the study.
The study found that deal activity accelerated after 2020 and peaked in 2023, which saw 18 transactions. The authors attribute this timing to global post-pandemic conditions, when low interest rates and large amounts of available capital, or "dry powder," made financing inexpensive, while healthcare's relatively stable revenues made it more attractive than other sectors.
Geographically, Karnataka recorded the highest number of deals at 13, followed by Maharashtra and Telangana with 10 each. Gujarat had six deals, while Keralam and Haryana saw five each. Northern and eastern states recorded minimal or no investment.
Four hospital groups together accounted for one-third of total deals: Manipal Health Enterprises and Health Care Global Enterprises, both headquartered in Karnataka, along with CARE Hospitals and ASG Eye Hospitals. Of the acquisitions studied, 47 (67.1%) were financed solely by foreign PE firms, including those based in the US, Singapore and Mauritius, while 18 were backed exclusively by Indian investors.
On the exit side, the study observed 25 PE exits. Secondary sales to other PE firms were the most common strategy at 64%, and the average holding period among exited investments was 5.1 years, with hospital platforms accounting for more than half of exits. Forty-five hospital groups (64.3%) remained under their original PE ownership. The study also noted that several platform deals were initially structured as minority stakes, with ownership expanding gradually over time, a staged approach it describes as consistent with more cautious, multi-step strategies seen across BRICS markets.
The study found that deal activity accelerated after 2020 and peaked in 2023, which saw 18 transactions. The authors attribute this timing to global post-pandemic conditions, when low interest rates and large amounts of available capital, or "dry powder," made financing inexpensive, while healthcare's relatively stable revenues made it more attractive than other sectors.
Geographically, Karnataka recorded the highest number of deals at 13, followed by Maharashtra and Telangana with 10 each. Gujarat had six deals, while Keralam and Haryana saw five each. Northern and eastern states recorded minimal or no investment.
Four hospital groups together accounted for one-third of total deals: Manipal Health Enterprises and Health Care Global Enterprises, both headquartered in Karnataka, along with CARE Hospitals and ASG Eye Hospitals. Of the acquisitions studied, 47 (67.1%) were financed solely by foreign PE firms, including those based in the US, Singapore and Mauritius, while 18 were backed exclusively by Indian investors.
On the exit side, the study observed 25 PE exits. Secondary sales to other PE firms were the most common strategy at 64%, and the average holding period among exited investments was 5.1 years, with hospital platforms accounting for more than half of exits. Forty-five hospital groups (64.3%) remained under their original PE ownership. The study also noted that several platform deals were initially structured as minority stakes, with ownership expanding gradually over time, a staged approach it describes as consistent with more cautious, multi-step strategies seen across BRICS markets.
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