India has cemented its position in Asia as a leading market for healthcare PE (Private Equity) deals. This achievement is even more significant as it gives India an edge over China in this space. Post-COVID, many Bio-Pharma and MedTech firms have been diversifying beyond China. They have been opting for a second reliable source to manufacture in countries with medical acumen and infrastructure to create final products at low costs of labour and make the product cost-effective.
Increasing Emphasis and Diversification in the Indian Healthcare Sector
India has always been the backbone of Western Health care industries directly or indirectly. Companies like Biocon have earned themselves global reputation in this arena internationally. This soon saw expansion into the domain of Medical Technology and Digital Health related companies started catering the domestic market as well with brands like HealthifyMe, Acko Insurance, MFine, amongst many others. This fuelled by the increasing reliance of young population looking to invest in these avenues rather than opting for traditional insurances.
Increase in Expenditure on Healthcare
Corporate tie-ups with health oriented players for insurance and other medical coverage, and other forms of workplace sensitizations has made the population more conscious towards their health. Data suggests investments in Healthcare sector have been reciprocating this rise in demand.
Major deals were struck since 2023, such as Blackstone edged to hold the dominating stake in Care Hospitals for $800 million (approx.) from TPG. Increasing equity is also being purchased in the IVF Clinic Chains in India. Temasek increased its ownership of Manipal Health Enterprises to 59% for around $2 billion from the existing 41%.
Much of these developments can be owed to change of perception after Covid and increasing accessibility of health and a variety of options being available.
Government Facilitation and Robust Manufacturing Set-Up
The government has been playing a pro-active role in helping the Pharma industry actualise its potential ever since Covid, as that phase saw India take the top position in supplying 50% of Global Vaccine Demand and become the top manufacturers of it.
The policy of Production Linked Incentives (PLI) has also helped accelerate the volume of production and enter the league of Top 3 Manufacturers of Pharmaceuticals globally, and the largest producer of Generic Pharmaceuticals.
As per Bain & Company’s Global Healthcare Private Equity Report of 2024,“ India’s emergence as a leading pharma hub has created an opportunity in pharma services, especially manufacturing services, such as contract development and manufacturing organizations (CDMOs) and active pharmaceutical ingredient (API) producers. Global PE funds—including Advent International under its Cohance Lifesciences brand, Carlyle via drugmaker Viyash, and PAG via Sekhmet Pharma ventures—continued to grow their API/CDMO platforms started in 2021–22 with a number of add-ons.”
Successful Exits in the Pharma Sector
The pharmaceutical industry is also being bolstered by Pharmaceutical Policy launched in 2023 by the government fostering Global Pharmaceutical Leadership, promoting self-reliance, advancing Health Equity and accessibility, enhancing Regulatory Efficiency and attracting investments. This has paved a path for many successful exits in the recent past such as major Private equity player KKR taking over JB Chemicals and Pharmaceuticals Ltd in a $414 Million deal.
This has enhanced India’s stature and reliability in the Pharmaceutical sector, which benefits the domestic as well as international markets.
