Credit:- Sugandh Khandelwal
2024 has been a transformational year for the healthcare sector in India, with mergers and acquisitions (M&A) playing a crucial role in shaping the future direction of businesses. This momentum is driven by several factors, including the demand for affordable quality healthcare, technological breakthroughs, and the expansion of services beyond metropolitan and Tier 1 cities. As the healthcare industry undergoes significant transformation, businesses are increasingly seeking new markets for growth to address emerging needs. This article examines the main themes and forces shaping healthcare mergers and acquisitions in India.
With high growth witnessed in India’s healthcare market, more and more companies, Indian as well as foreign players and PE firms, are showing interest in strategic transactions in the sector. Several factors make the Indian healthcare sector attractive to global investors which is why Mergers and Acquisitions (M&A) are back in business in India’s healthcare sector.
Healthcare M&A Trends
Apollo Hospitals has set an ambitious goal to add 3,512 beds by FY2029, with a capital investment of ₹6,100 crore (₹1.74Cr/Bed). A significant portion of this expansion will take place in Tier-2 cities such as Varanasi and Mysuru, highlighting its focus on underserved regions throughGreenfield projects.
Providing innovative cancer detection and treatment solutions, Apollo Hospitals secured an entry into Haryana and NCR region by acquiring a hospital on the Golf Course Road in Gurugram from Nayati Healthcare and Research Center at NCR for ₹450 crore. With this acquisition, Apollo plans to target the local NCR market and medical tourism while leveraging its digital platform Apollo 24×7.
The healthcare industry KKR sold its 27.5% stake in Max Healthcare in the open market for 9,400 crore, making it the most prominent exit by a private equity (PE) firm in this sector.
Manipal Hospitals (MHEPL) is also scaling up, opening a new hospital every two months. Recently, it entered the Mumbai market with the acquisition of Khubchandani Hospitals for ₹415 crore (₹0.83Cr/Bed), adding 500 beds to its network.
Singapore’s state investor, Temasek, aimed to invest up to $10 billion in India over the next three years, with a focus on healthcare. In 2023, Temasek expanded its stake in Manipal Hospitals to 59% with a $2 billion investment, reflecting growing foreign interest in Indian hospital chains amid rising healthcare demand.
Fortis Healthcare, backed by IHH Healthcare, Asia’s largest hospital brand, continues to expand its influence with a focus on integrated healthcare facilities across major Indian cities.
Narayana Health is diversifying by expanding its insurance arm, Narayana One Health, to improve healthcare access and affordability for a larger segment of the population.
Aster DM Healthcare and CARE Hospitals, Quality CARE India Limited were recently in merger discussions, aiming to become one of India’s top three hospital chains. In November 2024, Aster DM Healthcare announced its merger with Quality Care India, a hospital operator backed by Blackstone. This strategic consolidation aims to create a more robust healthcare network, enhancing service delivery across India.
KIMS Hospitals targets top-three status by FY2027, aiming to double its capacity to 8,000 beds and generating ₹5,000 crore in revenue through aggressive expansion efforts.
The Ontario Teachers’ Pension Plan Board (OTPP) announced an agreement to acquire a significant majority stake in Sahyadri Hospitals Group, the largest private hospital chain in Maharashtra, India, from the Everstone Group. Sahyadri Hospitals operates eight hospitals with approximately 900 operating beds and 300 critical-care beds, primarily around Pune, Maharashtra’s second-largest city. The group planned to expand its capacity by over 500 beds within the next five years. This acquisition marked OTPP’s first control private equity buyout in India and its fourth major investment in the country over a 12-month period. OTPP expressed intentions to leverage its global healthcare sector experience to scale Sahyadri into a national healthcare provider in the coming years.
Max Healthcare announced plans to invest ₹6,000 crore by FY2027 to expand its bed capacity to 9,000 beds, enhancing its presence in major Indian healthcare markets.In December 2023, Max Healthcare acquired Sahara Hospital lucknow, enhancing its presence in Northern India. Again In February 2024, the acquisition of Alexis Hospital marked Max Healthcare’s entry into the central Indian market and In September 2024, Max Healthcare acquired a 64% stake in Jaypee Healthcare, gaining control over hospitals in Noida, Bulandshahr, and Anupshahr, thereby strengthening its position in the National Capital Region.
HealthCare Global (HCG) has been in talks regarding the potential sale of CVC Capital’s 60% stake to Temasek Holdings. The discussions underscore HCG’s strategic position in India’s oncology-focused hospital segment.
Medanta is also positioning itself for significant growth by acquiring land in Mumbai’s Oshiwara district for a 500-bed greenfield hospital, with plans to further operate a 750-bed hospital in Delhi under an operations and management agreement.
Artemis Hospitals recently secured ₹330 crore in funding from the IFC – International Finance Corporation to support its goal of increasing its capacity from 713 to 2,000 beds by FY2026.
In December 2024, Reliance Industries, through its subsidiary Reliance Strategic Business Ventures, acquired Karkinos Healthcare for ₹375 crore. Karkinos Healthcare is a technology-driven oncology platform established in India with the mission of creating “cancer centers without walls.”This acquisition is part of Reliance’s larger strategy to expand its healthcareportfolio, especially in the oncology sector. By integrating Karkinos Healthcare’s solutions, Reliance aims to improve cancer care services and providing innovative cancer detection and treatment solutions accessibility across India.
These moves underscore the competitive intensity within India’s healthcare sector as hospital chains rapidly expand to secure market share, meet regional healthcare needs, and align with evolving healthcare demands across the country.
Why is reaching outside of big cities essential for healthcare growth in India?
As with any industry, the focus of the healthcare sector in India has traditionally been on metro and Tier 1 cities. However, we are witnessing a rapid shift toward smaller cities to address the supply gap. Prominent healthcare organisations such as Narayana Health, KIMS, Paras Hospitals, NephroPlus, and 7Med have expanded into Tier 2 and Tier 3 cities to broaden their reach and achieve desired growth. The increasing demand for reasonably priced, high-quality healthcare services presents significant growth opportunities in these regions, which lack adequate quality healthcare infrastructure.
Expanding healthcare services beyond major urban centers is critical to addressing healthcare disparities, improving health outcomes, and unlocking economic opportunities. Rural and semi-urban areas often face a shortage of quality medical facilities, specialists, and advanced diagnostics.Nearly 70% of India’s population resides in rural areas, but most tertiary healthcare facilities are concentrated in metros. Expanding services reduces the burden on urban hospitals and improves early disease detection.Also early interventions prevent minor health issues from becoming severe, reducing long-term healthcare costs.
How can healthcare systems emphasize accessible, high-quality care?
The provision of high-quality care at a reasonable cost has become a top priority in India’s healthcare market over the last ten years. Value-based care has been particularly effective in niche sectors like dialysis, where companies have established sustainable business models that balance expenses with patient satisfaction.
We have seen a rise in M&A activity in 2024, with businesses focusing on these regions and affordable quality care benefiting from the growing need for specialised healthcare services. Organisations that have established a reputation for delivering cost-effective treatment while upholding clinical excellence are likely to attract the attention of investors in the future. These businesses are increasingly attractive targets for M&A as they continue to grow.These moves underscore the competitive intensity within India’s healthcare sector as hospital chains rapidly expand to secure market share, meet regional healthcare needs, and align with evolving healthcare demands across the country.
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