India Healthcare M&A Trends: $30 Billion in Pharma Sector Investments

Hospital Sector Growth: Investments and Trends

India's healthcare and pharma sector recorded 594 merger and acquisition (M&A) and private equity (PE) transactions worth over $30 billion in deal value between 2022 and 2024, with the hospital sector emerging as a preferred investment destination. This shift is detailed in a joint report by Grant Thornton Bharat and the Association of Healthcare Providers of India (AHPI).

M&A and Private Equity Transactions

• Hospitals in India undertook M&A deals worth $6.74 billion.
• Private equity investors contributed $4.96 billion, making up 40% and 38% of M&A deals, respectively.
• Hospitals raised $466 million through initial public offerings (IPOs).

Valuation multiples for healthcare investments range between 20 and 30 times earnings before interest, tax, depreciation, and amortisation (EBITDA), particularly in high-demand specialties such as oncology, cardiology, and mother-and-child care.

Investment Drivers and Challenges

Foreign direct investments (FDI) in healthcare and diagnostics reached $3.2 billion during the two-year period. Investor focus on single-specialty hospitals such as nephrology and in-vitro fertilisation (IVF) attracted $1.4 billion in PE investments due to their asset-light, scalable models.

According to Bhanu Prakash Kalmath S J, partner and healthcare industry leader at Grant Thornton Bharat, shifting demographics, chronic disease cases, and emphasis on quality healthcare are reshaping India's healthcare landscape.

Girdhar Gyani, director general of AHPI, pointed out the urban-rural bed disparity, noting that 60% of hospital beds are in metro cities while 70% of the population lives in non-metro areas. Innovative financing models and enhanced training programs will be pivotal for equitable care access across India.

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