Adani group likely to enter healthcare sector, plans USD 4 billion investment
- ByStartupStory | May 2, 2022
Adani Group is currently lining up massive investments in the healthcare sector and may soon acquire diagnostic chains, and offline and digital pharmacies, multi-specialty hospitals, among other assets, to establish a foothold in the industry, two people aware of the development said.
Top executives of the group recently met various global private equity investors and foreign banks, where they outlined the company;s plans in the healthcare business, the people said, on the request of anonymity as the plans are at present private.
“The Adani Group is in discussions with some globally renowned names in the healthcare sector for a tie-up or joint venture for the India market, and an announcement is likely to happen soon,” the source said.The source also added that the group has earmarked up to USD 4 billion in a mix of equity and debt for the business and is talking to lenders and investors to devise a long-term funding plan.
“Adani has identified healthcare as a humungous opportunity and is very keen to consolidate the space, which at present remains fragmented with the market dominated by regional players, a large number of which are struggling for various reasons,” said the second source. “There also exists a significant amount of private equity capital invested in the healthcare sector, a majority of which is ripe for exit and may provide a buying opportunity for the group,” the person further added.
The growth of the Indian healthcare sector is driven by several factors, including abysmally low hospital beds per 1,000 population, a surge in lifestyle diseases, an increasing number of people aged above 60, and a large middle-class population, among others.
The source stated that the group is keen to develop a line of consumer-facing businesses and the healthcare foray is part of the strategy. The government has announced various policy initiatives to attract investments in the healthcare sector, including production-linked incentive schemes for boosting the domestic manufacturing of medical devices and pharmaceuticals.
The domestic healthcare sector, especially the online pharmacy space, has witnessed a surge in mergers and acquisitions in the past two years.
In August 2020, Mukesh Ambani’s Reliance Industries acquired a majority stake in online pharmacy Netmeds (Vitalic Health Pvt. Ltd) for ₹620 crore.
API Holdings, the parent of online pharmacy retailer Pharmeasy, bought a controlling stake in Thyrocare Technologies for ₹4,546 crores in the same month.
In August, US online retail giant Amazon launched its online pharmacy in India.Adani Group was founded in 1988 and is at present one of India’s largest business conglomerates, with over $20 billion in revenues. The group’s businesses span across sectors including power, green energy, food processing, airports, infrastructure, etc
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