-By ArdorComm News Network
December 5, 2024
Foreign direct investment (FDI) in India’s healthcare sector has seen a significant shift, with hospitals now commanding 50% of the total FDI in FY24, amounting to $1.5 billion. This marks a substantial rise from 24% in FY21, signaling a growing investor preference for hospitals over the traditionally dominant pharmaceuticals sector.
Post-Covid, hospitals and diagnostics have emerged as key areas for investment, driven by rising demand for quality healthcare, increased insurance coverage, and untapped potential in underserved regions. The surge has led to high-profile transactions such as Temasek’s $2 billion acquisition of an additional 41% stake in Manipal Hospitals, valuing the chain at $4.8 billion.
“The Indian market’s size, high disease burden, and growing insurance penetration make it an attractive destination for investors,” said Sujay Shetty, Global Health Industries Advisory Leader, PwC India. “The hospital sector’s reinvestment in infrastructure further supports its robust growth trajectory.”
Prominent hospital chains like Max Healthcare are spearheading expansion plans, with the group investing over ₹5,000 crore to double its capacity in the next three years. Abhay Soi, CMD of Max Healthcare, emphasized the capital-intensive nature of the sector and its critical role in achieving India’s $5 trillion economy target.
Investor interest has also been buoyed by successful primary market transactions, including IPOs of six hospital chains, raising around ₹3,600 crore through IPOs and qualified institutional placements (QIPs). This influx of funds is expected to boost bed capacity among the 10 listed hospital firms by 47% over FY24-27, with expansions concentrated in north and south India, according to BNP Paribas analyst Tausif Shaikh.
The momentum highlights a transformative era for India’s healthcare landscape, with hospitals at the forefront of FDI-driven growth, paving the way for enhanced healthcare access and infrastructure development nationwide.
Source: Times of India
Photo Credit: Times of India