Private equity investment in the healthcare sector remained strong in 2023, especially in India, where there were 22 deals worth $4.6 billion. slightly lower than the $4.7 billion recorded in 2022, the industry continues to attract significant financial activity, revealed the Annual Global Healthcare Private Equity Report, by Bain and Company.

The expanding middle class in the country is leading to a notable increase in spending on healthcare. This is happening because more people in the middle class have higher incomes, allowing them to allocate more funds to healthcare, the report highlighted.

Additionally, the availability of insurtech platforms and the involvement of private payers are contributing to this trend, making healthcare more accessible and driving up overall healthcare spending, the investment firm observed in the report. 

The report highlighted that India stands out as the main force expanding Asia-Pacific’s share of global deal activity, accounting for roughly 30 per cent of the region’s deal value from 2022 to 2023. Resilient economic growth, a business-friendly government, a maturing pharmaceutical manufacturing landscape, and a burgeoning middle class eager to pay for quality healthcare have resulted in many investment opportunities.  

Investors, including big names like TPG and Blackstone, see India as a promising place to invest in healthcare, it added.  

Globally, the healthcare sector has remained strong despite challenges like higher interest rates and geopolitical uncertainties. Biopharmaceuticals, which include innovative therapies, have been a major driver of investment, making up almost half of the global deal value, it added. 

Looking ahead to 2024, investors are expected to continue investing in groundbreaking technologies like generative AI and new therapeutic approaches. India, with its ongoing growth in the pharmaceutical sector and favorable government policies, remains a top choice for healthcare investments.  

Private equity firms like Advent International, Carlyle, and PAG are capitalising on India's healthcare growth, especially in services like pharmaceutical manufacturing and active ingredient production. The country has also seen a rise in digital health companies offering services in fitness, wellness, telemedicine, and insurance technology, the report highlighted.