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September 2010 
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India’s Healthcare Attracts PE, VC Interest |
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Claire Spencer, October 2009 |
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(19 October 2009)
Private equity and venture capital investments in hospitals may surpass that in clinical research and drug manufacturing sectors, according to a report in the Economic Times. It is widely thought that hospital investments offer safer returns with fewer risks.
Indeed, Parvez Ahmed, CEO of the Delhi-based Max Healthcare hospital chain, told the newspaper that the interest in healthcare from private equity firms has been tremendous of late. “This has become very visible in the last five to six months. They have begun to understand the potential in seeing healthcare as a long-term investment.”
In return, healthcare-focused investment funds bring several strengths to the table. “It’s not just equity infusion,” asserts Raja Parthasarathy, managing director of IDFC Private Equity.
“The dedicated healthcare funds also bring in technical expertise and professional management to doctor-run individual hospitals. These hospitals can also benefit from being part of a larger chain and bigger brand,” he said, speaking to the newspaper.
It is thought that private equity interest in pharmaceutical and clinical research has waned due to the increasing risk profile of such investments. “Generic business is no longer a money-spinning option. Clinical research and contract research businesses are dominated by established players, thereby limiting the options for equity investments. Small pharma companies offer less business potential as compared to the healthcare segment, which is still in an evolving stage in the country,” said one industry expert, speaking to the Economic Times.
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