Indian Hospitals Lure Private Equity as Demand Surges

Bloomberg News – By Adi Narayan and Ruth David – May 28, 2012

Indian hospitals are admitting more than just patients.

Private equity funds such as Sequoia Capital and Advent International Corp. are buying stakes in hospitals in the South Asian nation, lured by a market that’s forecast to reach more than $80 billion in revenue in 2015.

“If you want to deploy capital in India, health care is a nice area to be in,” Abhay Pandey, a managing director at Sequoia’s India unit, said in an interview. “It has lesser regulatory issues and usually no governance issues. Most of the investment is going after a very large, untapped market.”

Pankaj Nangia/Bloomberg

Private equity firms are set to invest the most in Indian hospitals in at least six years in 2012, according to Chennai- based Venture Intelligence. There were 12 investments in hospitals, clinics and drug makers totaling $527 million so far this year, almost double the $287 million in 2011, the researcher said. Sequoia, the fund that backed Google Inc. (GOOG), said this month it paid 1 billion rupees ($18 million) for a stake in Moolchand Healthcare Ltd., a New Delhi hospital operator which plans to add fertility clinics and medical centers.

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