India’s single-specialty healthcare chains are projected to more than double their market size to $9 billion by 2028, growing at an impressive compound annual growth rate (CAGR) of 24%, according to a recent report by Avendus Capital. Currently valued at $4 billion, this segment holds a 27% share within the broader single-specialty market.
As reported by thehindubusinessline, the report attributes this growth to solid financial fundamentals, including EBITDA margins of over 20%, return on capital employed (ROCE) exceeding 30%, and a breakeven timeline of under two years for most players.
Private Equity Investments Fuel Expansion
Over the past decade, private equity investments in the segment have crossed $3.7 billion, making up more than 35% of all hospital-related investments in India. A significant portion—nearly 70%—of this capital has gone into established specialties such as in-vitro fertilisation (IVF), eyecare, mother and child care, dialysis, and oncology.
New Specialties Capture Investor Attention
However, in the last three years, specialties such as dental care, urology/nephrology, and skin and hair care have also begun attracting substantial investor interest. This shift is largely due to growing demand-supply gaps in these areas, making them attractive opportunities for expansion and investment.
Replicable Models, Low Capital Intensity Appeal to Investors
According to the report, these single-specialty formats offer a favorable combination of low capital requirements, targeted healthcare delivery, and scalable business models. These features have increasingly attracted the attention of both institutional investors and healthcare entrepreneurs.
Moreover, market leaders in various specialties are leveraging capital to expand via mergers and acquisitions, signalling a potential wave of consolidation in the near future.
Public Market Opportunities on the Horizon
Avendus Capital further noted that with leading players eyeing the public markets, the market capitalization of listed single-specialty chains could jump from $3.9 billion currently to $18 billion by FY2030. This surge will likely be driven by a mix of new stock market listings and organic growth of existing listed entities.
Tier-2 Markets Poised to Drive Next Growth Wave
Anshul Gupta, Managing Director and Head of Healthcare Investment Banking at Avendus Capital, stated that India’s single-specialty sector is undergoing a structural transformation, propelled by favorable unit economics and increased investor confidence.
He added that while metro and Tier 1 cities currently account for most of the market presence, the next phase of growth is expected from Tier 2 and smaller towns, where there are still significant white spaces.
India’s Healthcare Landscape Entering a New Phase
Gupta also highlighted that more scaled platforms are likely to enter capital markets, mirroring the growth trend seen in the multi-specialty sector over the past decade. Although scaling will require strong operational execution, India has the necessary momentum, he said.
“Such models have already succeeded in developed countries,” Gupta observed. “It is only a matter of time before India follows suit—and that time is not far away.”