India’s healthcare sector sees record investments as consolidation & technology drive growth: Report
The year’s biggest healthcare deal—a $5 billion merger between Aster DM Healthcare and Quality Care India—reflects a growing trend of consolidation, according to a report by Grant Thornton.
India’s healthcare sector is witnessing a surge in investments, with mergers, acquisitions, and private equity deals surpassing $30 billion between 2022 and 2024. Hospitals accounted for nearly 40% of the total deal value, underscoring investor confidence in the sector’s long-term growth prospects, according to a report by advisory firm Grant Thornton.
In 2024 alone, hospital investments reached approximately $6 billion, marking a 24% year-on-year increase, the report stated. The year’s biggest healthcare deal—a $5 billion merger between Aster DM Healthcare and Quality Care India—reflects a growing trend of consolidation as hospital chains seek scale and operational efficiency.
Multi-speciality hospitals continued to command investor interest, while single-speciality facilities such as IVF, oncology, and nephrology centers have attracted $1.4 billion in private equity funding over the past two years.
Additionally, the report noted that foreign direct investment (FDI) in healthcare remained strong, with $3.2 billion flowing into the sector between 2022 and 2024, aided by 100% FDI approval under the automatic route. Major transactions include Temasek’s $2 billion investment in Manipal Health and BPEA EQT’s $656 million acquisition of Indira IVF, signalling sustained international interest in India’s growing healthcare market.
Despite the surge in capital, healthcare infrastructure remained unevenly distributed. While 60% of hospital beds are concentrated in metro cities, 70% of India’s population resides in rural areas, highlighting a significant gap in access to quality care, the report added. Expansion into Tier II and Tier III cities has emerged as a key growth area, with government-backed public-private partnerships (PPPs) playing a crucial role in bridging this divide.
Technology is also reshaping India’s healthcare landscape. The adoption of AI diagnostics, robotic surgeries, and telemedicine platforms is accelerating, improving both patient outcomes and hospital efficiency. According to the report, the country’s AI-driven healthcare market is projected to grow from $14.6 billion in 2023 to $102.7 billion by 2028, fueled by rising investments in digital health solutions. The government-backed telemedicine platform e-Sanjeevani has already facilitated over 300 million remote consultations, bringing healthcare access to underserved areas.
Investor appetite remains strong, with valuation multiples for hospitals ranging from 20x to 30x EBITDA. Key metrics such as bed occupancy rates, revenue per bed, and EBITDA margins are driving investment decisions. The Bangalore, Delhi-NCR, and Mumbai regions have emerged as investment hotspots, collectively accounting for over 350 healthcare deals in recent years.
“India’s healthcare sector continues to attract strong investor interest, driven by its resilience, scalability, and growing demand for specialised care. Single-specialty platforms, in particular, have emerged as a key focus for investors due to their ability to deliver consistent growth, scalable operations, high ROCEs and targeted clinical outcomes. Investors prioritise models that efficiently deploy capital, generate robust returns on investment, and address unmet patient needs, especially in underserved markets. Platforms that combine clinical expertise, operational efficiency, and the ability to replicate success across multiple locations create an optimal balance of impact and profitability," Vishal Bali, Executive Chairman, Asia Healthcare Holdings (AHH).
Despite the growth, challenges persist. India faces a 2.4 million hospital bed deficit, particularly in rural regions, while 40% of healthcare spending remains out-of-pocket, placing financial strain on uninsured patients, the report pointed out. Regulatory hurdles, including complex approval processes for new hospitals and technology adoption, continue to slow expansion.
However, strategic funding models—including healthcare bonds, asset-light investments, and foreign capital inflows—are helping to address these challenges. As insurance penetration rises and policy support strengthens, India’s healthcare sector is poised for continued expansion, with a focus on scaling specialized care facilities, integrating AI-driven solutions, and improving access in underserved areas.
Edited by Jyoti Narayan