Healthcare, Pharma in India Secure USD 30 Billion in M&A, PE Transactions

Capitalizing on demographic factors, technological advancements, and increasing demand for quality and preventive care, the healthcare sector of India has become a key component of the Indian economy. Rise in chronic lifestyle diseases and welding attentiveness towards augmenting the healthcare infrastructure are rapidly overtaking the industry.

According to a report by Grant Thornton Bharat and the Association of Healthcare Providers India (AHPI) titled Vitals for Growth, Decoding Healthcare Financing and Funding in India, healthcare and pharmaceutical sector in India has seen about 594 mergers and acquisitions and private equity transactions putting it beyond USD 30 billion value.

Approximately 40% of these deals were for hospitals, which speaks about considerable investor interest in infrastructure development and operational efficiencies. The hospital segment accounted for 44% of the total dealvalue, with nearly USD 6.1 billion-a year-on-year growth of approximately 24%. Multispecialty hospitals continued to dominate healthcare delivery, while recent consolidations focused on augmenting efficiency and regional form.

Attractive private equity investments between through 2022 to 2024 received USD 1.4 billion because to their scalability and operational performance from single-specialty hospitals.

The investment made in healthcare and diagnostics through FDI represents USD 3.2 billion between 2022 and 2024 as against total FDI inflows till dated since April 2000 at USD 11.19 billion which primarily targeted hospital chains, diagnostics, and specialized care.

Dr. Girdhar Gyani, Director General, AHPI stated, "To strengthen India’s healthcare infrastructure, it is crucial to address the shortage of healthcare professionals, with a deficit of 1.54 million doctors and 2.4 million nurses. The urban-rural disparity remains a challenge, as 60% of hospital beds are concentrated in metro cities while 70% of the population resides in non-metro regions.

The increasing cost of medical treatments and high out-of-pocket expenditures further necessitate innovative financing models. Addressing these concerns through enhanced medical training programs, incentives for rural healthcare expansion, and digital health adoption will be pivotal in ensuring equitable access to care across all regions of India."

"As the sector evolves, clinical excellence must remain its cornerstone. Delivering high-quality patient care, backed by innovation and operational efficiency, is essential to attract investors, building trust and sustaining value. Optimizing key performance metrics—such as EBITDA margins, patient volumes, and cost management—will be critical for hospitals to thrive in the years ahead", added Bhanu Prakash Kalmath S J, Partner and Healthcare Industry Leader, Grant Thornton Bharat.