Business snapshot of the healthcare sector in May and June 2021
26 Jul 2021
Continued investments in HealthTech, focusing on upgrading healthcare infrastructure in the country and emerging consolidation, are driving India's healthcare sector trends.
Our recent analysis of the healthcare sector aims to capture key trends and highlights in the last two months, including:
  1. Key investment and deals
  2. Sub vertical wise trends focused on:
    • Healthcare delivery
    • Diagnostics
    • HealthTech
    • Medical devices and consumables
    • Insurance
    • Regulatory
As per Praxis analysis, three key themes that emerged in the healthcare sector are:
  1. HealthTech segment in India maintained high growth with investments of US$ 655M in the past two months, a 63 percent increase from total investments in March - April
  2. Focus on initiatives for upgrading the healthcare infrastructure to tackle the pandemic
  3. Emerging consolidation in the sector, primarily led by E-pharmacy

1. Key investments and deals

Key acquisitions - 
  • E-Pharmacy
    • PharmEasy acquired Medlife (provider of an online pharmacy for medications) for US$ 250M; it also acquired a listed diagnostics chain Thyrocare for US$ 600M
    • Tata Digital acquired a majority stake (US$ 270M) in India’s leading online healthcare marketplace 1MG
  • Drug manufacturing
    • CPP Investment Board and Rare Enterprises acquired Zydus Animal Health and Investments Limited (manufacturer of animal and bird’s healthcare products) for US$ 398M
    • Goldman Sachs acquired a significant stake (US$ 329M) in Aragen Life Sciences (Aragen), formerly known as GVK Biosciences, by acquiring shares previously held by ChrysCapital and other existing shareholders
2. Sub-vertical wise key highlights of the month:
  • Healthcare delivery expansion:
    • Expansion of tertiary care hospitals: Ujala Cygnus Group (tertiary care hospital chain) acquired Haldwani’s Central Hospital in line with its long-term strategy of establishing a significant presence in smaller towns
    • Expansion of dental care clinics: Dental care startup MyDentalPlan has announced to add more than 4,000 clinics as part of a retail expansion strategy, expanding its footprint to more than 250 cities by year-end
    • Expansion of vaccination capacities: Central Government launched a new COVID-19 vaccination policy on June 21 that will provide free COVID-19 to all Indian citizens above 18 years of age
  • Diagnostics: HealthTech startup Niramai and the Indian Institute of Science (IISc), has developed XraySetu specifically designed to identify COVID-19 positive patients even from low-resolution chest X-Ray images sent over WhatsApp, with the support from the Department of Science and Technology (DST)
  • HealthTech:
    • Drug major LUPIN to enter the digital healthcare space in India with a focus to provide a digital therapeutics platform for doctors and patients
    • launches India’s first app for the cancer community ‘CANNECT App’ dedicated to connecting patients, caregivers, survivors, and experts.
    • AstraZeneca partners with Docon to digitalize 1,000 clinics across India
  • Medical device and consumables: Wipro GE healthcare to locally manufacture Versana Ultrasound range as part of the company’s strategy to expand localization and strengthen the supplier ecosystem
  • Insurance: Plum, provider of a health insurance & benefits marketplace for employers, raised US$ 15M in series A round from Tiger Global Management
  • Regulatory and policy:
    • Quality assessment: Quality Council of India (QCI) launched the Indian Certification of Medical Devices (ICMED) plus scheme to verify the quality, safety, and efficacy of medical devices
    • Subsidy for new units making COVID-19 medical equipment: Uttar Pradesh Cabinet approves a 25 percent subsidy for new units making medical equipment. Under this scheme, production of items like regulators, ventilators, cryogenic tankers, liquid medical oxygen, and hospital beds will be allowed to avail the subsidy
  • Tax exemption on employee’s COVID treatment: 
    • Central Government announced that any amount paid by an employer to an employee for COVID-19 treatment will be exempt from income tax in FY20 and subsequent years
    • Term liquidity facility: RBI announced a credit facility of INR 50,000 crore with tenor up to three years at the repo rate till 31 March 2022, to boost immediate liquidity for ramping up COVID-19-related healthcare infrastructure and services in the country. Under this scheme, banks can provide fresh lending support to vaccine manufacturers, hospitals, and patients for treatment
  • Financing support:
    • Central Government created an additional fund of INR 23,000 crore dedicated to COVID-19 treatment facilities which will result in a 25x increase in COVID-19 dedicated hospitals
    • Under the Pradhan Mantri Garib Kalyan Anna Yojana, the Government will give INR 1,000 to senior citizens, widows, and specially abled
India continues to recover from the COVID-19 pandemic crisis on the back of the increased pace of vaccination and other favorable policies implemented by the regulatory authorities to strengthen the overwhelmed COVID-19 related healthcare infrastructure in the country. INR 50,000 crore credit facility by the RBI and INR 23,000 crore fund by the Government will help with both newer COVID-19 related hospitals and a higher number of beds within the existing hospitals. The HealthTech startups have also played their part by solving for challenges caused by COVID-19 related restrictions and protocols. The massive adoption of technology in healthcare and the significant headroom for growth provides a high growth opportunity for HealthTech startups and has driven investor interests as can be seen by the large amount of funding received by the sector in the last two months.

Authored by:
Sumit Goel, Managing Partner and Head - Healthcare and Pharma

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