Non-metro locations, such as Lucknow , Vizag, Jaipur, Cochin, Siliguri, Guwahati, Bhubaneswar and Patna, private equity investors believe, hold great growth potential in healthcare, in lockstep with an increasing affordability quotient in tier- 2 or 3 towns, and a greater availability of qualified doctors and specialists.
PE funds are looking for players that will give higher returns – and blockbuster exits when the investments run their course.
“A trifecta of factors is helping accelerate investor interest in the single specialty healthcare chains including significant growth opportunity in tier 2/3 cities, clearly visible unit economics and viability with best in class ROIs,” said Vishal Bali, executive chairman, Asia Healthcare Holdings (AHH), a leading healthcare investment platform, with focus on single specialities like oncology, women and child care, fertility, urology and nephrology.
“AHH has been the inflection point for Single speciality healthcare with all our companies in single speciality healthcare delivering consistent growth in revenues, ebitda and geographical reach along with ROIs” he said.
Therapeutic Areas
Parking PE monies in treatment areas such as IVF, nephrology, eye-care, oncology, mother & childcare among others, have become a credible prescription for future value creation, after nearly a decade-long hunt for multi-speciality assets across the country.
According to an analysis done by Avendus, single-speciality hospitals account for over 40% of all PE investments in healthcare since 2019. This was just a bit over 15% between 2015 and 2018.
Between 2020 and early 2025, the segment recorded 24 PE/VC investments totalling $1.8 billion, with 19 of those deals worth $1.2 billion closing in the last two years alone, shows data put together by Grant Thornton.
“Equity interest has notably shifted toward single-specialty hospital platforms, supported by their ability to deliver consistent clinical outcomes, efficient capital deployment, and attractive returns,” said Bhanu Prakash Kalmath SJ, partner and healthcare industry leader at Grant Thornton Bharat.
In the single-specialty format – where each hospital typically has a bed capacity of 40-50 presents the opportunity for greater geographical depth compared to multi-specialty hospitals where the average size is about 250-300 beds.
“The model works well for investors from a capital requirement (average Rs 30-40 crore investment per facility depending on specialty) which also works well from a return on equity perspective,” said Bali. AHH companies are present in 60 cities around the country.
There is an increase in investor interest in areas such as IVF, nephrology, ophthalmology, oncology and mother and childcare. “These sectors are expected to maintain momentum as players expand beyond metro centers into tier-2 and tier-3 cities, improving accessibility while tapping into underserved markets,” said Bhanu.
Affordability, Incomes
Increasing affordability in smaller towns and rising awareness are prompting a surge in demand for healthcare facilities in smaller towns.
“Areas such as IVF, eye care, nephrology (dialysis), and oncology are the some of the sectors that present a lot of scope for expansion into the smaller towns in Tier 2 and Tier 3 areas,” said Anshul Gupta, MD and head, healthcare investment banking at Avendus Capital.
In the last ten years till March 2025, over $10 billion of private equity money has gone in as investment into the healthcare sector, out of which two-third has been in multi-speciality and one-third has been in single-speciality.
“But post-Covid, an increasing chunk has started flowing into single-speciality healthcare chains. Because that’s where the next phase of allocation is going to happen,” said Gupta.
Data shows that over 60% of investments made in emerging single specialities like urology, mother & childcare and skincare have come in the last 2-3 years.
Eye-care and nephrology emerged as the most active specialties in terms of volume, while IVF led in value with $942 million in investments.
Top PE transactions in single specialty healthcare in the last 2 years include Indira IVF-BPEA EQT, NephroPlus-Quadria Capital, TPG Growth and Temasek in Dr Agarwal Healthcare, among others.
There is also an increase in the availability of qualified doctors and specialists in small towns in the last 3-4 years post-Covid.
“Earlier, doctors used to prefer to stay and work in big cities. But post Covid, some of that has changed because people have got used to staying back in their hometowns,” said Gupta.
“We are witnessing a higher trend in clinicians looking to grow their practices in tier 2 cities with improving social infrastructure and availability of quality education for their children. The availability of clinical talent is another positive that is prompting investors to look at single-specialty healthcare opportunities, said Bali.
