India is one of the fastest-growing healthcare markets in the world, and the entry of more corporate players is a positive development, according to Viren Shetty, Executive Vice-Chairman of Narayana Health. However, while capital expenditure (capex) is important, it is also crucial to hire skilled doctors and train nurses to improve quality, he noted.
Shetty explained that as more hospitals are built, overall industry standards will rise. He also stated that large business groups entering the sector could help bring better organisation and attract more investment.
One key challenge, according to Shetty, is India’s reliance on imported medical equipment and consumables. “The larger the domestic healthcare industry grows, the more entrepreneurs come in and start becoming suppliers to Indian hospitals. So yes, I mean, long term, this is something that would only benefit the industry,” he said.
Shetty acknowledged concerns about rising healthcare costs due to increasing privatisation. He explained that different business models cater to various market segments—some focus on cost-efficient, affordable healthcare, while others provide premium services with high-end infrastructure.
He also shared his views on private equity (PE) investment in healthcare. “Private equity (PE), like any other fund, who is financing this industry is looking for the return of their money. It is just that the sources of capital are very different and the business model we build around that has to cater to that.” He added that a growing and competitive industry with investor interest will ultimately benefit consumers by offering more choices.
Ankit Thakker, CEO of Jupiter Life Line Hospitals, who also participated in the discussion, highlighted the need for strong ethical standards as more private equity and industrial houses enter the healthcare sector.
On the issue of affordability, he stressed that healthcare costs worldwide are beyond the reach of the average person without insurance. “Nowhere in the world, a quality healthcare cost is within the reach of an average person out of pocket. So, the aspiration for affordability has to be through the insurance procurement, and that is the way we need to look at it,” Thakker said.
Private equity and venture capital firms are increasingly betting on India’s healthcare sector. In 2024, PE/VC deals surged to 84 transactions, up from 62 last year, signalling strong investor confidence. However, the deal value has shifted—investments in hospitals and clinics have fallen sharply from $4.6 billion in 2023 to $1.2 billion this year. At the same time, funding in medical equipment and devices has increased nearly fivefold to $1.2 billion, reflecting a growing focus on technology and innovation.
Narayana Health has a market capitalisation of ₹30,422.17 crore, with its shares gaining around 7% in the past year and Jupiter Life Line Hospitals has a market capitalisation of ₹9,474.29 crore, but its shares have declined by nearly 2% over the past year. CNBCTV18