Global private equity firms are driving Indian healthcare’s expansion into smaller cities by investing in local hospital chains to address gaps in public medical infrastructure. Indian healthcare has become a hotspot for buyout groups, with foreign backing enabling providers to grow in underserved towns. Varun Khanna, CEO of Blackstone-backed Aster DM Quality Care, said there was a misconception that running hospitals in lower-tier cities is not viable, noting that a small Indian city can have a population of one million, comparable to large Australian cities. The chain, formed from a merger of four hospital brands including Blackstone acquisitions from 2023, plans to add 5,000 beds in the next three to four years, focusing on underserved regions. India spends less than 1.5% of GDP on public healthcare, far below the 2.5% target set by Prime Minister Narendra Modi, with public hospitals often overcrowded and under-resourced, especially in rural areas where 70% of the population lives. The country faces a deficit of 2.4 million hospital beds, pushing the private sector to handle nearly 60% of hospitalisations and 70% of outpatient services. Between 2020 and March 2025, over $14.5 billion flowed into the sector, with Blackstone, KKR, and Carlyle acquiring hospitals and diagnostics firms. KKR’s $1.4 billion bid for Medicover India’s 5,000-bed business is among the largest deals. Despite a 1.6% decline in the BSE Hospitals index this year, the sector continues to grow due to ageing populations, rising chronic diseases, and increased affordability.
Key figures include Varun Khanna of Aster DM Quality Care, Bollineni Bhaskar Rao of Krishna Institute of Medical Sciences, and Preeti Kumar of the Public Health Foundation of India.
Source: Financial Times Companies · Summarized by HeadlinesBriefing