What do rising health premiums mean for Indian M&A?

Hello,

It’s been another busy week in Indian M&A. Here’s what’s new.

The Sunil Mittal-Warburg Pincus consortium inched ahead of rivals for a stake in Haier India, a deal that could signal deeper Indo-Chinese decoupling in consumer electronics manufacturing, as strategic investors (like Mittal) team up with global PE players to control domestic operations of multinational OEMs.

Hines, Mitsubishi and Sumitomo have formed a joint venture for office assets pointing to global industrial powerhouses joining forces with Indian developers, and long-term confidence in India’s commercial real estate, even as the West sees a downturn in office demand.

Meanwhile, Indian B2B marketplace Udaan, a closely watched startup, raised $114m in Series G funding ahead of listing, suggesting renewed investor confidence for tech IPOs.

Finally, Warburg Pincus received regulatory permission to acquire 10% in neobank IDFC First Bank, as global PE deepened its exposure to the country’s fintech offerings as a possible long-term bet on Indian banking which remains viable despite macro volatility.

Hope you enjoy this week’s roundup. Do connect with me on LinkedIn to find out how I may help with your next M&A deal.

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Market Trends

Hardship+reliable demand define India’s healthcare story 

India’s healthcare system is caught in a paradox. It is both overburdened and underbuilt, yet it attracts medical travellers from across Asia. Its growth story isn’t one of generous policy spending; rather, it has thrived because households have had little choice but to pay out-of-pocket and do so more than any other global population (see below). 

Source: The Unlisted Intel

India’s consumers contribute 50% of the country’s total health expenditure. In the world’s second most populous country, quality and timely care means paying first and claiming later. State insurance schemes fill some gaps, but access remains a problem, and coverage, patchy.

Proven momentum

Health insurance premiums are higher than ever at $13.07 bn in FY24 – more than tripled from $3.82 billion in FY16. 

Source: Bajaj Finserv

This reflects a broader momentum in the sector, as shown by investor returns in the past three years. 

Source: Simply Wall St

Medical equipment generated close to 180% returns and healthcare services 147%, though healthtech clocked in at -61%.

A market ripe for disruption

India’s resource-to-population ratios of beds, doctors, nurses per 1,000 people are among the lowest globally, across both public and private providers. This has made healthcare a target for investors and scale-ups.

Source: The Unlisted Intel

Public health expenditure remains anaemic at below 2% of GDP, according to the World Bank, far below the global average as talent continues to leak abroad. 

These yawning gaps are being filled by eager government-incentivised private capital.

Deal flow is increasingly tilting toward tangible mid-market assets: hospital chains, diagnostics, and insurance aggregators. Smart money is building and operating hospitals, where CAGR estimates range from 8% (hospitals) to 22% (preventive care).

Just a few weeks ago, KKR invested $600 million in leading hospital chain Manipal Group to fund long-term strategic needs. This comes alongside news that:

• 360 One Asset invested $20 million into Paras Healthcare, a mid-market multispecialty chain in northern India.
• The World Bank’s investment arm, IFC proposed lending $35 million for Fibe, a consumer lending platform helping salaried millennials finance their own treatments.
• Stable Money recently raised $20 million in Series B to aggregate health+insurance and other retail products.
• Manipal Healthcare is reportedly looking to list for $1 billion.

These deals address three core areas: capacity (hospitals), financial friction (Fibe), and savings channels (Stable Money) all catering to India’s pay-first consumers.

For decades, successive governments underinvested in healthcare infrastructure and since liberalisation, India’s healthcare approach has been: private-fast, public-slow. This rising willingness to pay and the undersupply is what investment bankers call the real India story, a multi-vertical, decade-long investment buildout powered by necessity.