Mumbai: Bulge-bracket private equity funds are increasingly investing in single-speciality Indian hospital chains that present a robust growth potential in emerging consuming centres, significantly widening the addressable market beyond their traditional metropolitan bailiwicks.
Non-metro locations, such as Lucknow, Vizag, Jaipur, Cochin, Siliguri, Guwahati, Bhubaneswar and Patna, private equity investors believe, hold great growth potential in healthcare, in lockstep with an increasing affordability quotient in tier- 2 or 3 towns, and a greater availability of qualified doctors and specialists.
PE funds are looking for players that will give higher returns and blockbuster exits when the investments run their course.
“A trifecta of factors is helping accelerate investor interest in the single speciality healthcare chains including significant growth opportunity in tier 2/3 cities, clearly visible unit economics and viability with best in class ROIs,” said Vishal Bali, executive chairman, Asia Healthcare Holdings (AHH), a leading healthcare investment platform, with focus on single specialities like oncology, women and child care, fertility, urology and nephrology.
“AHH has been the inflection point for Single speciality healthcare with all our companies in single speciality healthcare delivering consistent growth in revenues, Ebitda and geographical reach alongwith ROIs” he said.
Therapeutic Areas
Parking PE monies in treatment areas such as IVF, nephrology, eye-care, oncology, mother & childcare among others, have become a credible prescription for future value creation, after nearly a decade-long hunt for multi-speciality assets across the country.
According to an analysis done by Avendus, single-speciality hospitals account for over 40 per cent of all PE investments in healthcare since 2019. This was just a bit over 15 per cent between 2015 and 2018.
Between 2020 and early 2025, the segment recorded 24 PE/VC investments totalling $1.8 billion, with 19 of those deals worth $1.2 billion closing in the last two years alone, shows data put together by Grant Thornton.
“Equity interest has notably shifted toward single-specialty hospital platforms, supported by their ability to deliver consistent clinical outcomes, efficient capital deployment, and attractive returns,” said Bhanu Prakash Kalmath SJ, partner and healthcare industry leader at Grant Thornton Bharat.
In the single-speciality format – where each hospital typically has a bed capacity of 40-50 presents the opportunity for greater geographical depth compared to multi-speciality hospitals where the average size is about 250-300 beds.
“The model works well for investors from a capital requirement (average Rs 30-40 crore investment per facility depending on speciality) which also works well from a return on equity perspective,” said Bali. AHH companies are present in 60 cities around the country.
There is an increase in investor interest in areas such as IVF, nephrology, ophthalmology, oncology and mother and childcare. “These sectors are expected to maintain momentum as players expand beyond metro centres into tier-2 and tier-3 cities, improving accessibility while tapping into underserved markets,” said Bhanu.
