Key Takeaways
- • InvAscent chairman Hari Buggana told Moneycontrol it is "too simplistic" to conclude that private equity ownership of hospitals by itself drives up treatment costs, citing multiple cost drivers that exist regardless of ownership.
- • Buggana warned that caps on hospital margins on medicines and medical devices could hurt compensation for senior doctors and slow expansion into underserved tier 2 and tier 3 cities.
- • PE-backed healthcare providers account for less than 5% of hospital beds in India, according to Buggana.
- • InvAscent has made 33 investments across Funds I, II and III, exited 20, and is deploying Fund IV, with seven investments made and roughly $400 million expected to be deployed including co-investments.
- • Fund V is planned for launch in the later part of 2027, with Fund IV described as oversubscribed and backed by several marquee domestic LPs.
Summary
Healthcare-focused private equity firm InvAscent's founder and chairman Hari Buggana said in an interview with Moneycontrol that it is too simplistic to conclude that private equity ownership of hospitals is driving up the cost of treatment, as debate intensifies over rising medical costs and steep mark-ups on medicines and medical devices. Buggana noted that several large listed private hospital networks, including Apollo, Manipal, Max, Fortis, Narayana, Medanta and KIMS, operate in India, and that only Manipal is controlled by a foreign investor, Temasek. He said any concerns are more likely to pertain to tertiary care specialities in metros, where costs are higher, and that cost pressures such as hospital infrastructure, compliance, clinical complexity and staffing exist irrespective of whether a hospital is promoter-owned, listed or PE-backed. He added that PE-backed providers account for less than 5% of hospital beds in India.
On proposed regulation, Buggana said caps on hospital margins on medicines and devices would affect operating models, with compensation for super-specialists and senior consultants, a significant share of tertiary hospital operating costs, potentially taking a hit. He also argued that expansion into tier 2 and tier 3 cities could be constrained, and that shifting margins to room or operating theatre charges would likely draw regulatory scrutiny. He said private capital can help hospitals expand geographically, professionalise management, strengthen governance and invest in technology. PE investors in the mid-market segment may see limited impact on returns, he said, since valuations there are not high to begin with.
On deal activity, Buggana said mid-market healthcare delivery valuations have moderately increased. InvAscent's Fund III average entry valuations were around 10x EV/EBITDA, which may have risen by a turn or two in Fund IV, while large-cap PE firms have pushed up valuations in transactions above $100 million. Historically, over 50% of the funds' investments by value have gone to pharma, with healthcare delivery at 25-30%. Buggana highlighted complex manufacturing such as sterile injectables and CDMO/CRDMO services, cited the Gland Pharma and Maiva Pharma investments, and described China+1 as an early-stage opportunity for India to move up the value chain. He also pointed to domestic medical devices moving into Class C and D products.
On fundraising, InvAscent has made 33 investments across Funds I to III and exited 20, with its most recent exit being the IPO of Symbiotec, which was oversubscribed more than 75 times. Three more Fund III portfolio companies are reportedly in the IPO pipeline. Fund IV has seven investments so far, and the firm expects to have deployed about $400 million including co-investments, forming a base for a Fund V blind pool targeted for late 2027.
On proposed regulation, Buggana said caps on hospital margins on medicines and devices would affect operating models, with compensation for super-specialists and senior consultants, a significant share of tertiary hospital operating costs, potentially taking a hit. He also argued that expansion into tier 2 and tier 3 cities could be constrained, and that shifting margins to room or operating theatre charges would likely draw regulatory scrutiny. He said private capital can help hospitals expand geographically, professionalise management, strengthen governance and invest in technology. PE investors in the mid-market segment may see limited impact on returns, he said, since valuations there are not high to begin with.
On deal activity, Buggana said mid-market healthcare delivery valuations have moderately increased. InvAscent's Fund III average entry valuations were around 10x EV/EBITDA, which may have risen by a turn or two in Fund IV, while large-cap PE firms have pushed up valuations in transactions above $100 million. Historically, over 50% of the funds' investments by value have gone to pharma, with healthcare delivery at 25-30%. Buggana highlighted complex manufacturing such as sterile injectables and CDMO/CRDMO services, cited the Gland Pharma and Maiva Pharma investments, and described China+1 as an early-stage opportunity for India to move up the value chain. He also pointed to domestic medical devices moving into Class C and D products.
On fundraising, InvAscent has made 33 investments across Funds I to III and exited 20, with its most recent exit being the IPO of Symbiotec, which was oversubscribed more than 75 times. Three more Fund III portfolio companies are reportedly in the IPO pipeline. Fund IV has seven investments so far, and the firm expects to have deployed about $400 million including co-investments, forming a base for a Fund V blind pool targeted for late 2027.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.