India top pick for healthcare investment

Mumbai: Private equity and venture capital funding in healthcare over the past five years along with a slew of investments from global players has strengthened the perception of India as 'attractive healthcare investment destination', a report said.

The private equity and venture capital funding in healthcare has risen by over 13 times, to $1,275 million in 2016 from $94 million in 2011, a recent report on funding in Indian healthcare by PricewaterhouseCoopers (PwC) said.

The sector has also seen a significant increase in foreign direct investment inflows over the last three years. FDI in healthcare as a percentage of total FDI has steadily increased from 1.2 per cent in 2011, to 1.6 per cent in 2016, the report said.

A slew of investments by global health players, including the Parkway Group and a host of players from the Middle East, have strengthened the perception of India as an attractive healthcare investment destination, it added.

In addition, the success of initial public offerings with four key IPOs over the last 18 months of Dr Lal PathLabs, HCG, Narayana Hrudayalaya and Thyrocare, has reinforced investor confidence in the sector, the report added.

The report notes a growing need for healthcare spending as personal expenditure constitutes more than 60 per cent of all health expenses, which is a major drawback for a country like India which is poor.

Approximately 63 million people fall into poverty each year due to lack of financial protection for their healthcare needs, the report points out.

“Average cost of hospital treatment has gone up by a cumulative annual growth of 10.4 per cent between 1996 and 2014, which is much higher than the consumer price index (CPI) inflation of 7.2 per cent in the same period,” the report said.

Poor infrastructure, shortage of a skilled workforce and lack of standards also impact the quality of care, it added.