Single-specialty healthcare is set to fuel India’s next IPO boom

TPG and Temasek-backed Dr Agarwal’s Health Care Ltd, TPG-backed Asia Healthcare Holdings, EQT-backed Indira IVF chain are among those that have set the ball rolling for their public markets debut. While some have filed their offer documents, others are bulking up their platforms to become more feasible for retail investors.

“Two to three IPOs (in this space) are expected in the next year, and another 3-5 (IPOs in single specialty hospital segment) by 2027,” said Anshul Gupta, managing director and head of healthcare investment banking at Avendus Capital, noting that there is yet significant opportunity for value creation in this segment.

Indira IVF has appointed merchant bankers Kotak Mahindra Capital, Nomura International, JPMorgan and IIFL Securities for its upcoming IPO next year, a person with knowledge of the development said. The IVF chain plans to raise up to ₹4,000 crore in the IPO, the person cited above added. 

Also read: Metropolis Healthcare cashes in on its rich valuation to acquire Core Diagnostics

Indira IVF, JPMorgan, Kotak, IIFL and Nomura did not immediately respond to a request for comment.

Dr Agarwal’s Health Care filed its draft papers on 27 September. Mint earlier reported that Asia Healthcare Holdings is likely to go public in the next year or two.

Growing market segment

India’s single-specialty hospitals are not only growing at a brisk pace but account for 20% of the total healthcare services market, according to Vipin Singhal, associate director, Anand Rathi Investment Banking. This segment, according to him, has been growing at a rate of 12 -14%, slightly faster than the overall hospitals market.

Singhal cited the mother and child category (over $6 billion) as the leading category, followed by dental, eyecare, ortho, and ENT. Oncology, eyecare, and orthopedics are among the fastest-growing specialties, and he expects established single specialties to see higher levels of interest.

“In recent years, there has been a surge in private equity investment, mergers and acquisitions, and IPOs across subsectors, including hospital services (multi- and single-specialty), pharmaceuticals and diagnostics, showcasing broad-based investor interest,” said Bhanu Prakash Kalmath S J, partner and national leader – healthcare, Grant Thornton Bharat LLP. “Among these, diagnostics and single-specialty hospitals have emerged as particularly attractive segments, especially for PEs, due to their scalability and asset-light business models.”

Several companies in this space have raised significant sums through private equity and are aggressively expanding into tier-2 and 3 cities. This not only addresses the growing demand for specialized care but also positions these companies to leverage economies of scale and improve margins. Given their enhanced market presence and growth trajectories, many are likely to pursue IPOs in the medium term to further fuel expansion and unlock shareholder value, Kalmath said.

Companies that have raised private equity capital recently include NephroPlus, ASG Eye Hospital and Cloudnine Hospitals. Mint reported in September that Cloud nine is expected to go public over the next year or so.

Avendus’ Gupta said the single-specialty healthcare sector is teeming with mid-sized scaled players that could be scaled, making them potential targets of consolidation. “Some, like Dr Agarwal’s, have even established dedicated in-house teams for mergers and acquisitions, actively pursuing 8-15 deals annually.”

According to Abhishek Aggarwal, partner–corporate finance, KPMG in India, these are typically 3,000-8,000 square feet (sq ft) units for eyecare and IVF, and 15,000-20,000 sq ft for mother and child, compared to a 200,000 sq ft set-up for a multi-specialty unit.

For 2025, he said, there are numerous promising sub- ₹100 crore revenue players in single-specialty segment who are candidates for growth funds from mid-market private equity players. “These can also be easy pickings for large platform plays who are looking to scale up ahead of their IPOs.”

Standalone hospitals with 200-400 beds present strong bolt-on opportunities for large PE-backed hospital platforms, especially since these often struggle to attract significant private equity interest on their own, he said.

According to Neha Agarwal, managing director and head of equity capital markets at JM Financial Institutional Securities, the appeal of single-specialty firms is down to their efficiency, profitability and scalability. These centres require relatively low capital investment and break even faster than their multi-specialty peers, increasing their appeal to investors.

Focused on high-margin procedures, they generate greater revenue with fewer patients and command premium pricing for specialized services in demand, Agarwal said. Additionally, she said, their replicable hub-and-spoke model facilitates quick expansion, particularly in underserved urban and tier 2 and 3 markets.

“More than 10 companies in the healthcare and pharma space have already filed their draft IPO papers with Sebi. Many single-specialty players are also coming to the market,” Agarwal said. We will see an IVF player and a few multi-specialty hospitals preparing for IPOs in the coming months.”