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The Indian pharma and healthcare sector experienced notable advancements in Q2 2024, driven by substantial value deals and modest overall volume growth. Healthtech and medical devices segments attracted significant investor interest, large deals in healthtech were observed in the pharmacy retail segment. Anticipating increased investments in API, biotechnology, and CDMO segments, supported by government initiatives, the healthcare sector is set for further growth, especially in single specialty hospitals and digital healthcare.
Key insights from the Pharma and Healthcare Dealtracker Q2 2024:
Big deals drive growth: The Indian pharma and healthcare sector witnessed significant growth in terms of value in Q2 2024 compared to the previous quarters, driven by a few large value deals. Overall volumes were healthy with marginal growth. There were 55 deals valued at USD 4.1 billion. Comparing these numbers y-o-y with Q2 2023, the overall deal value has grown by 57% from USD 2.6 billion, with 37 deals.
Sustained growth in PE activity: The investors are continuing to show confidence in the sector. While the quarterly volumes remain steady, values witnessed a whopping 21x growth from Q1 2024, driven by eight high-value deals exceeding USD 100 million, highlighting an increasing number of big-ticket transactions. The PE investments in healthtech, medical devices and single specialty hospitals suggest a growing demand for advanced healthcare solutions, innovation and specialised care. This trend highlights lucrative opportunities for investors and a promising future for improved healthcare access.
India's healthcare Budget outlook: As India moves towards the goal of ‘Viksit Bharat’, we expect a substantial increase in the overall health budget to reach ~3% of the gross domestic product (GDP) in the upcoming Union Budget 2024 to address existing gaps in healthcare, especially in rural healthcare infrastructure and preventive care. This will offer a fertile ground for private investments, including public private partnerships, to play a critical role in shaping a healthy India.
