The Ken · সাধারণ

KKR and Blackstone found ‘platforms’ in hospitals. Will patients find healthcare in them?

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Blackstone and KKR now sit atop close to 100 Indian hospitals between them, with KKR’s August buyout of Medicover valued at 46X Ebitda. The old game of buying private, listing public, and pocketing the arbitrage is slowly vanishing
Across PE-owned hospitals, doctor consultation fees are compounding 3–7 percentage points faster than pay for salaried staff. Hospitals are paying more for the patient flow and reputation that star doctors bring with them
Goodwill routinely makes up over 70% of the price paid in Indian hospital acquisitions, roughly double the global norm. Buyers are paying a steep premium for brand value and other intangibles
A parliamentary committee has flagged corporate hospital consolidation and the high tariffs that come with it, and is weighing price caps on these tariffs

Even if you stand at a stolid degree of remove from anything subjective, the pull of the private equity and private healthcare tango in India today is palpable. Not a quarter goes by without a sizable deal.

“It’s a potent combination; insurance is the least insidious player now—to give the devil its due—but it won’t be for long,” said the co-founder of a 150-bed hospital in one of the southern cities. Despite building a standalone hospital, considered “financially and reputationally successful”, the founders had to sell out. It had become untenable to manage the wage bill as PE-backed hospitals came with “blank cheques” for their doctors.

It doesn’t matter what the poaching costs are; hospitals are paying.

“You can’t say it’s one and not the other; all major hospitals are PE-backed and there’s more capital than ever to attract the person they want…And you can’t really blame the doctors when they get offers they can’t refuse,” said the chief executive of a mid-sized hospital in Bengaluru. He bowed out of the business when a budding chain acquired his hospital in 2025.

India’s hospital industry is, depending on your vantage point, either the most mouth-watering investment story in Asia or the most stomach-churning experiment in healthcare. The country has never been here before.

On 18 September, integrated healthcare-service provider Aster DM Healthcare issued an addendum to its annual general meeting, announcing a Rs 6,900-crore expansion plan over the next two years. A day earlier, global private-equity firm Advent International paid Rs 3,150 crore to acquire nearly a quarter of Yatharth Hospitals in a transaction that values the national capital region-based chain at about 33X its Ebitda, a measure of operating performance. The average public-market multiple for listed Indian hospital chains is 27X.

“This is an unrealistic valuation; how do you ever justify that?” reasoned the chief executive quoted above.

Of the 14,000 beds added to India’s listed hospital universe over the last six years, 55% were acquired or leased from existing operators rather than built.

But the PE money flowing into Indian hospitals has its own reasons. When The Ken wroteThe KenHow many hospitals can PE firms buy before patients say enough about this two years ago, it was all about buying a privately-owned company low and selling it high by taking it public.