Deluge of investment in healthcare in India?

 08-Jun-16, ValueNotes

Private equity investment in healthcare will continue to see high growth due to strong industry drivers and a track record of successful exits. This is likely to drive up valuations.

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Over the last few years, the healthcare sector has seen an increase in investments from private equity firms. From around $500 million in 2011, investments touched a record high of close to $1600 million in 2015.

The average size of deals has also gone up over the years. In 2015, six investments of more than $100 million were made. Hospitals and clinics attracted over half of this, followed by pharmaceuticals and diagnostics.

Virtually all PE funds have identified healthcare as a key target sector in their portfolio. There is a huge under-met demand in healthcare services. The private sector provides far better services than the government, and is likely to remain the key driver of growth.

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