India’s healthcare sector sees $30 billion in deals over a decade, hospitals dominate M&A and PE investments

India's healthcare and pharma sector has recorded 594 M&A and private equity transactions, totalling over $30 billion in deal value over the past 10 years, according to a report released by Grant Thornton Bharat in collaboration with the Association of Healthcare Providers India (AHPI).

The $5 billion merger between Aster DM Healthcare Ltd and Quality Care India Ltd in 2024 was the largest M&A deal of the 2014-2024 period, while the $2 billion investment by Temasek Holdings in Manipal Health in 2023 was the biggest private equity deal of the decade. Hospitals accounted for nearly 40% of M&A and PE transactions during this period, underscoring investor focus on infrastructure expansion and operational efficiency, the report, titled Vitals for Growth: Decoding Healthcare Financing and Funding in India, stated.

“India’s healthcare landscape is being reshaped by shifting demographics, rising chronic lifestyle diseases, and an increasing emphasis on preventive care and quality healthcare services. These structural shifts, coupled with growing insurance penetration and post-pandemic resilience, are redefining patient expectations and healthcare delivery models. Simultaneously, investor interest in value-based care models and efficiently run hospitals continues to grow, supported by strong market fundamentals and a favourable investment climate,” said Bhanu Prakash Kalmath S J, Partner and Healthcare Industry Leader, Grant Thornton Bharat.

According to him, 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, build trust, and sustain 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,” he added.

The report explores financing trends in India's healthcare sector, which has become a key driver of the nation’s economy, fuelled by demographic shifts, technological advancements, and rising demand for quality healthcare. It notes that since April 2000, FDI inflows into healthcare and diagnostics have reached $11.19 billion (as of September 2024), primarily targeting hospital chains, diagnostics, and specialized care facilities.

“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. Additionally, the rising cost of medical treatments and high out-of-pocket expenditures necessitate innovative financing models. Enhancing medical training programs, offering incentives for rural healthcare expansion, and adopting digital health solutions will be pivotal in ensuring equitable access to care across India,” said Dr. Girdhar Gyani, Director General, AHPI.