“The reality is, of course India is [at] He told MINT in an interview. “At present, you think the big players are very small compared to the industry you have consolidated for 30 or 40 years in 30 or 40 years,” he said.
Compared to markets like Australia, the UK and South Africa, where three to four private hospitals control 60-70% of bed capacity, the Indian hospital industry is very fragmented and has less than 10% of the top ten private participants in private bed capacity. “What I want to say is that right now in India, more dispersed than in France, the UK, Australia and South Africa when I started my career 30 years ago,” Horambi said.
Manipal Health Enterprises, Apollo Hospitals Enterprises and the recently merged ASTER DM Quality Care are the three largest private hospital chains in India. Currently, according to a speech by its Q3FY25 investor, Apollo has 10,169 beds and the combined Aster DM Quality Care will have 10,150 beds. According to its website, Manipal has over 9,500 operating beds.
However, the speed of integration is happening at a faster pace, and the industry will change dramatically over the next 20 years.
“Integration in the future, standardization is just a huge opportunity…In the next 20 years, India will change dramatically, just like a few countries that are ahead of India in the integration stage.” While the initial merger may be in 8-10 groups, Horanby believes there is a lot of room for the merger. “There will be real temptation to merge and get scale,” he said.
In addition to the merger of larger chain stores, India may also have brands of chains such as dentists, veterinary clinics. With these doctors running these businesses near retirement age, they see more private equity. “I think what we are going to see is the corporateization of the businesses that the owner manager currently owns,” Horambi said.
“…As I get older, a lot of these doctors happen, and they actually I actually spend a lot of time away from my organic clinical practice, and I want to re-tune that, merge with something bigger, where I take care of it here, which is probably a good thing.
In healthcare, Rothschild, a Paris-headquartered financial advice and investment banking firm, was most recently adviser to TPG and Evercare on the sale of a controlling stake in Care Hospitals to Blackstone in 2023, advised on the sale of a majority stake in Ideal Cures to Colorcon in 2023, and advised on the sale of Oaknet Healthcare to Eris Lifesciences in 2022.
IPO space
With growing interest in the industry, many hospital chains are now publicly available in India.
“You have a very happy IPO market here. We have a lot of investors who want to buy stories. You have good liquidity and are very positive in valuation of the company,” Horambi said. He added: “The reality is that private equity has bought everything in France, the UK, etc. and has been a very strong source of capital… And in India, there are private equity houses, but many promoters are proud of their business, which is almost like when I grew up, I want to be a promoter of a public company.”
Healthcare is underrepresented in the public market in India.
“If you compare the market capitalization of pharmaceutical stocks to the total size of the Indian pharmaceutical industry and the same is true for health care services, then you will find that health care services are significantly underrepresented in public market listing stocks,” Barr said, meaning that it means health care services will generate a lot of interest from public market investors.
Bankers believe that IPOs will become a secular trend in India in the coming years. In the past decade, India’s total IPO IPOs, 60%-70% pointed out over the past three years, adding that India is the second highest active IPO market after the United States in 2024.
Another major change ongoing is the growing share of domestic flow to the market, BAL added. “If you looked 10 years ago, it could be said that for 2015, many IPOs were more dependent on foreign institutional capital entering the country… We think this massive trend of large domestic flows into the public market is secular because, compared to several other countries, domestic investors still have much lower ownership of the stock market and there is a long runway here.”
For healthcare, given that this is a very regional business, most investors’ interest is domestic.
“India has a lot of expertise, a lot of Indian entrepreneurs … If you look at the origins of some hospital groups, they don’t start with the money from the hospital. They have money, they decide to do something,” Horambi said. “So, I think the business will continue to grow. I don’t really see the role of foreigners.”
Growth of Allied Services
With the merger and grouping of hospitals, alliance services such as diagnosis will also be. “I expect whatever happens in the hospital industry, the acute hospital industry, or the outpatient center,” Horambi said.
“In diagnosis, this is another industry that can only grow if there are clients, businesses that are engaged in this service,” Horambi said.
However, as services begin to become more complex, the demand for more diagnostics and more complex testing will continue to grow, leading to further growth in the diagnostic chain.
Horambi added: “Assuming that economic growth and people’s prosperity will continue to move forward, we will need greater diagnostic capabilities. There is a lot of room for growth.”
