South India has the hospitals, patients and purchasing power: Private equity sees its next big healthcare investment opportunity

A peer-reviewed study by researchers Megha Reddy, Cyrus Engineer and Yashaswini Singh, published in BMC Health Services Research by Brown University's School of Public Health and Johns Hopkins Bloomberg School of Public Health, finds that private equity investment in India's healthcare delivery sector is heavily concentrated in urbanised southern and western states. The study identified 70 PE-backed acquisitions between January 2007 and May 2025, with Karnataka recording the most deals at 13, followed by Telangana and Maharashtra at 10 each and Kerala at five. The authors attribute this concentration partly to established healthcare ecosystems, noting that southern states have consistently outperformed on provider density, service utilisation and health indicators.

Hospitals were the dominant target, accounting for 45 acquisitions, or 64.3% of all transactions. Of these, 33 involved multispecialty hospitals. Clinics and outpatient services accounted for 16 deals, laboratory services for seven and elder care for two. The authors contrast this with high-income markets such as the United States, where PE has focused on high-margin outpatient specialties, noting that India's PE activity has largely targeted large hospital platforms. Drivers cited include the burden of non-communicable diseases, rising disposable incomes and India's reputation as a medical tourism hub.

Foreign investors dominated, accounting for 47 of the 70 deals, with firms headquartered in the United States, Singapore and Mauritius. The researchers linked India's attractiveness to its liberalised foreign investment framework, including the automatic route permitting 100% FDI in hospitals, as well as tax and other policy incentives. Activity accelerated after 2020, peaking at 18 acquisitions in 2023, which the authors partly tie to low interest rates and abundant investment capital during the pandemic.

Several major platforms illustrate the concentration. Manipal Health Enterprises and Health Care Global Enterprises (HCG), both Karnataka-headquartered, recorded six and four acquisitions, respectively, while CARE Hospitals and ASG Eye Hospitals each recorded six. Together these four platforms accounted for nearly one-third of identified deals. Asia Healthcare Holdings operated 147 locations and Indira IVF 171 as of May 2025.

The researchers caution that the concentration could widen existing geographic inequalities, as Tier 2 and Tier 3 regions saw little to no investment. They suggested policy incentives and blended finance models could redirect capital toward underserved areas, and called for stronger ownership transparency, disclosure requirements and monitoring. The authors said the long-term implications of PE ownership for quality, equity and financial protection in India remain uncertain, noting that US evidence linking PE ownership to higher prices and workforce reductions cannot automatically be applied to India.