Strong Private Equity Investments In The Medical Devices Sector: Key Catalysts

The Indian medical devices sector is seeing a surge in private equity (PE) investments, driven by promising opportunities and a rapidly expanding market. Since 2017, there have been about 59 PE transactions in this space, with deals increasing by 3.3 times compared to pre-COVID-19 levels. This trend is anticipated to continue, with both international and domestic players eyeing the market's growth potential.

Prominent transactions in the medical devices space include investments such as Warburg Pincus’s $210 million investment in Meril Life Sciences, Samara Capital’s $150 million funding in stent manufacturer SMT, and KKR’s acquisition of Hema from Apax Funds, valued at over $800 million. Indian companies have concentrated their deal activity on medical consumables and mid-range equipment. This includes single-use products like syringes and higher-end equipment, such as stents and ventilators, produced by a growing number of Indian manufacturers.

Why Private Equity is Betting Big on Medical Devices

According to media reports, the Indian medical devices market, valued at approximately $11-12 billion, is one of the fastest-growing globally, with a projected CAGR of 10-12 per cent until 2030. Within this, the medical consumables and implant segment is estimated at $4-4.5 billion, also growing at 10 per cent CAGR. Indian manufacturers benefit from competitive pricing, skilled labor, and cost-efficient production, giving them an edge in the global market.

“The healthcare sector is ripe for innovation, with new technologies such as artificial intelligence (AI), robotic surgeries, wearable health devices, and telemedicine transforming patient care. PE firms are eager to invest in these emerging technologies, which offer the potential for rapid growth and strong returns,” said Dr Samant Darshi, Founder and Director -Psymate HealthCare, Noida.

“We view this surge in private equity investment as more than just financial backing—it's a powerful partnership that brings in capital, strategic expertise, and a forward-looking mindset. This allows us to expand rapidly, embrace cutting-edge technologies, and deliver innovative healthcare solutions at scale,” said Yatharth Tyagi, Director - Yatharth Group of Hospitals.  

“Private equity is also playing a pivotal role in enhancing access to care in underserved regions, aligning with the broader vision of a healthier and more inclusive India,” Tyagi added.  

Challenges and Competitive Landscape

Despite growth, challenges remain. The industry faces competition from China, which is seen as a decade ahead in medical device technology. Multinational corporations still dominate higher-tech sectors, which make up about 80-90 per cent of the market share for specialized devices and high-end surgical accessories. To close this gap, Indian companies are increasingly focusing on R&D, with some investing up to 5 per cent of revenue to enhance technology capabilities and meet global standards.

Key Factors Catalysing Growth

• Domestic Demand: With the healthcare infrastructure expanding, there’s a strong push for domestically produced, high-quality, affordable medical devices.
• Regulatory Support: The government’s Make in India initiative and regulatory frameworks, such as USFDA and EU MDR certifications, are enhancing quality and fostering a trusted domestic market.
• Increased R&D Spending: As Indian firms invest more in R&D and build regulatory expertise, they’re better positioned to manufacture more complex products,  previously dominated by MNCs.
• Domestic Ecosystem: India’s emerging medical device parks, collaborative industry-government efforts, and sector-specific skills programs are gradually establishing a self-sustaining ecosystem for the industry.

Currently, India excels in consumables and products used in non-complex procedures. However, experts anticipate a gradual move into high-tech manufacturing. This shift is contingent on an increase in domestic consumption and market share from multinational competitors, along with scaling innovation in more advanced medical devices.

“Growing demand for healthcare and India's relatively stable political and economic environment makes it a favourable destination for international investments. The combination of a large, underserved population, an expanding HealthTech ecosystem, and a conducive investment climate, positions India as a major market for growth in the healthcare sector. The country is well on its way to becoming a key player in the global healthcare industry,” said Omkar Nakade, Co-Founder and Director, MEDNET Labs.  

The Indian medical devices sector stands at a pivotal moment, with private equity seeing robust growth potential fueled by favorable market conditions and government support. Over the next decade, the sector is expected to expand its footprint both domestically and internationally, with increased R&D and innovation. As Indian firms enhance their product portfolios and quality standards, the industry’s global standing is set to rise, potentially positioning India as a major player in the global medical devices market.

Sambhav Kumar

BW Reporters