India’s healthcare sector is undergoing significant transformation, driven by massive investments, particularly from global private equity (PE) firms and Indian corporate conglomerates. Notable contributions include the Adani Group’s commitment of ₹6,000 crore (USD 6.93 billion) to develop two Adani Health Cities (AHC) in Mumbai and Ahmedabad. These state-of-the-art healthcare hubs, built in collaboration with Mayo Clinic, will feature multi-specialty hospitals, medical colleges, and cutting-edge research facilities.
Similarly, the Bajaj Group has pledged ₹10,000 crore (USD 11.53 billion) to establish a network of hospitals across the country, as reported by Bloomberg. The Tata Group is expanding its healthcare footprint with a ₹500 crore investment in Breach Candy Hospital in Mumbai. Additionally, the Tata Group operates several healthcare institutions, including the Tata Memorial Centre and an animal hospital in Mumbai. In December of the previous year, Reliance Industries Ltd (RIL) acquired Karkinos Healthcare, a leading oncology-focused healthcare platform, for ₹375 crore.
A Surge in Mergers and Acquisitions in Healthcare
The demand for high-quality healthcare in India, driven by demographic changes and evolving medical needs, has fueled a surge in investments. Bhanu Prakash Kalmath S J, Partner at Grant Thornton Bharat, emphasized this trend, noting the growing investment in the sector.
According to the Grant Thornton Bharat Annual Deal Tracker, India’s healthcare sector saw an all-time high of USD 9.96 billion in mergers and acquisitions in 2024, three times the value of the previous year. Hospitals accounted for 44 percent of these deals, totaling USD 5.56 billion.
Private equity investments in Indian hospitals reached a peak of USD 3.79 billion in 2023 but declined to USD 504.09 million in 2024. Notable deals in 2023 included Blackstone’s acquisition of Care Hospitals and KIMS for over USD 1 billion and Tamaesk’s acquisition of Manipal Hospitals for USD 2 billion. Furthermore, BPEA EQT purchased Indira IVF for USD 657 million.
In 2024, the merger of Aster DM Healthcare with Quality Care India Limited (QCIL), backed by Blackstone, created Aster DM Quality Care, the third-largest hospital network in India, valued at USD 5.08 billion.
Why Private Hospitals Are Gaining Popularity
Private hospitals are becoming increasingly attractive to investors due to two primary factors: rising insurance penetration and insufficient healthcare infrastructure.
Since the onset of the Covid-19 pandemic, insurance coverage has expanded rapidly in India, driving greater demand for quality healthcare. Dheeresh Pathak, Fund Manager at WhiteOak Capital AMC, pointed out that insurance has shifted patient expectations. “Previously, people were content with ward beds. Now, with insurance, they are more likely to request private rooms and seek the best possible coverage their policies offer,” he said.
Despite India’s relatively low health insurance penetration compared to developed countries, the gap is narrowing. A study by Bajaj Finserv shows that between FY20 and FY24, health insurance premium collections surged from USD 7.04 billion to USD 13.07 billion, indicating growing coverage across the nation.
