Private equity pours money into India primary healthcare
Private equity funds quadrupled their investment in India's primary healthcare, betting the sick and ailing will stop seeing family doctors in often cramped and dingy quarters and check into modern chains sprouting up across Asia's No.3 economy.
Goldman Sachs Group Inc, Warburg Pincus LLC, Sequoia Capital and the Government of Singapore Investment Corp are among investors that pumped $520 million into India's basic healthcare industry this year, compared with $137 million in 2011, according to Thomson Reuters data. Some analysts predict investment will surpass $1 billion in 2013.
Organised healthcare providers including Apollo Hospitals Enterprise Ltd and Fortis Healthcare Ltd are betting that growing numbers of patients will be willing to pay two or three times more for better-equipped clinics - all under a model that can be replicated fast and offers investors the potential for quick returns. "The family doctor concept is slowly phasing out as migrants in cities look out for a brand rather than visiting a general physician next door," said Santanu Chattopadhyay, CEO of NationWide Primary Healthcare Services, in which U.S.- based Norwest Venture Partners has invested $4.6 million.
The opportunity is vast: India's unorganised primary healthcare system is worth $30 billion and is growing at least 25 percent a year. The challenge will be convincing the sick to give up their trusted family doctors.
The country's primary healthcare sector will draw at least $1 billion annually in private equity investment over the next couple of years, said Shantanu Deb Mookerjea, executive director at Mumbai-based advisory firm
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