Health Care
In 2011 the Indian healthcare industry was estimated at Rs 2,20,671 crores with the private sector contributing nearly 70% of the total market. The India healthcare sector is expected to grow at a CAGR in excess of 24% to reach Rs 15,44,690 crores by 2020 with the private sector contributing nearly 80-85%.

Hospitals and pharmaceuticals top the list for generating maximum revenues in the Indian healthcare industry with 71% and 13% of industry revenue respectively. Other sub-sectors such as medical equipment and supplies, Insurance and diagnostics share a smaller part but play a key role in the development of this sector.

In the recent past, this sector has attracted significant interest from many private equity players. The sector has witnessed numerous big ticket transactions such as Advent International’s INR 520 cr (USD 105 Mn) investment in CARE Hospitals (multi specialty hospital), The Government of Singapore Investment Corporation (GIC)’s investment of Rs 500 crores in Vasan Healthcare (a chain of eye hospitals), Olympus Capital Asia’s investment of Rs 500 crores in DM Healthcare (which runs hospitals in India and West Asia) amongst other transactions.

With a variety of factors such as increase in life expectancy, lifestyle diseases, rising incomes and affordability, growing population and economy, expanding middle class, rise in incidence of diseases, increased Government outlays, better awareness of health and increase penetration of health insurance, the demand for healthcare services is expected to grow exponentially. India has a competitive advantage in healthcare over peers owing to its large skilled manpower, low cost of surgeries, presence of corporate hospitals, availability of highly qualified doctors and scientists and their expertise. India’s huge expat population itself and medical tourism industry is expected to substantially add to the revenues expected in future.

Most hospital chains, with a view to have a larger market share and profitability, have aggressive expansion plans to scale up their activities and establish a pan India presence with expansion plans to enter the under-penetrated tier II and III cities. We believe that this sector has tremendous potential for attracting investments as well as for future consolidation.
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