Adani plans $4 billion foray into healthcare
Company sets sights on hospitals, diagnostic centres and pharmacies
MUMBAI: Gautam Adani, the world’s fifth-richest person, is lining up massive investments in the healthcare sector and may acquire large hospitals, diagnostic chains, and offline and digital pharmacies, among other assets, to establish a foothold in the sector, two people directly aware of the group’s plans said.
Top executives of the group, which runs businesses ranging from airports to seaports, recently met several foreign banks and global private equity investors, where they outlined the group’s plans in the healthcare business, the people said, requesting anonymity as the plans are private.
“The Adani Group is in discussions with a few globally renowned names in the healthcare sector for a joint venture or a tie-up for the India market, and an announcement may happen soon,” one of the two people said. “The group has earmarked up to $4 billion in a mix of debt and equity for the business and is talking to investors and lenders to devise a long-term funding plan.” An email query to a spokesperson for the Adani Group remained unanswered until press time on Sunday.
“Adani has identified healthcare as a huge opportunity and is keen to consolidate the space, which remains fragmented with the market dominated by local and regional players, a large number of which are struggling for various reasons,” said the second person. “There is also a significant amount of private equity capital invested in the healthcare sector, a good chunk of which is ripe for exit and may provide a buying opportunity for the group,’’ the person said.
Several factors are driving the growth of the Indian healthcare sector, including abysmally low hospital beds per 1,000 population, a growing number of people aged above 60, a large middle-class population, and a surge in lifestyle diseases.
“The group is keen to develop a line of consumer-facing businesses and the healthcare foray is part of the strategy,” the first person said. The government has announced several policy initiatives to attract investments in the healthcare sector, including production-linked incentive schemes for boosting the domestic manufacturing of pharmaceuticals and medical devices.
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. In June last year, Tata Digital Ltd, a unit of Tata Sons Pvt. Ltd, picked up a majority stake in digital health company and e-pharmacy 1MG Technologies Pvt. Ltd.
API Holdings, the parent of online pharmacy retailer Pharmeasy, bought a controlling stake in Thyrocare Technologies for ₹4,546 crore in the same month. In August, US online retail giant Amazon launched its online pharmacy in India.
Founded in 1988, Adani Group is one of India’s largest business conglomerates, with more than $20 billion in revenues.