Though the country is lowly ranked in terms of quality and accessibility of healthcare, this indicates that there is tremendous scope for enhancing healthcare services penetration in India and ample opportunity for the development of the healthcare industry as a whole.

The healthcare sector can be a leading factor that affects a country’s economic growth. A comparison of the basic health indicators clearly reveals that the developed nations of the world fare far better on healthcare provision and utilisation, compared to developing nations. The allocation of resources—money, infrastructure, people, education, and products, one of the biggest differences between developed and developing countries, is the main reason for this. Countries with low human development have made lower allocations to healthcare infrastructure and as a result, the sector as a whole remains largely untapped and neglected. The primary challenge then for a developing country today, is ensuring universal healthcare—how can access to healthcare be improved, both in terms of reach and affordability; how can the needs of the vulnerable and under-privileged populations be addressed. India’s basic and limited healthcare infrastructure is starkly inadequate for meeting the huge population demand. The unmet opportunity combined with strong fundamentals in the market, has led to the emergence of private healthcare service providers, giving a fillip to the country’s healthcare system. We have today one of the largest private health sector in the world to meet the needs of the population adequately of the country. The private healthcare institutions provide world class facilities, employ highly skilled and globally recognised professionals, leverage advanced technology in treatments, and maintain high standards of quality. The private sector has done a commendable job in creating pockets of excellence and simultaneously generating significant value. The enduring success of early movers has encouraged the emergence of multiple players in this space and spawned industry diversification and in-depth specialization. The Indian healthcare industry has become a preferred sector for strategic and financial investments. Private sector players occupy a major share of nearly 80% of the country’s total healthcare market. They also account for almost 74% of the country’s total healthcare expenditure. Their share in hospitals alone is estimated at 74%, while the share of hospital beds is estimated at 40%. The Indian healthcare sector is strongly supported by the government which has been undertaking commendable work to develop India as a global healthcare hub and has a goal of raising its healthcare spending to 2.5% of GDP from the current level of 1.1% of the GDP in the next few years. Over the years, several initiatives to drive the growth of the healthcare sector have been yielding positive results. These initiatives have gone a long way in not only improving the overall healthcare access for the general population, but have also enhanced the quality of healthcare in the country.
Though the country is lowly ranked in terms of quality and accessibility of healthcare, this indicates that there is tremendous scope for enhancing healthcare services penetration in India and ample opportunity for the development of the healthcare industry as a whole. Conducive policies for encouraging FDI, tax benefits, and favourable Government policies coupled with promising growth prospects are helping the industry attract private equity, venture capital and foreign players. Today, Indian firms are entering into alliances with domestic and foreign companies to drive growth and gain new markets. Going ahead, strong fundamental factors such as rising income levels, ageing population, growing health awareness and changing attitude towards preventive healthcare are expected to boost healthcare services demand. In these uncertain and volatile times, Indraprastha Medical Corporation Ltd, which is a joint venture between the Delhi government and Apollo Hospitals, is a good stock bet for investors looking at stable companies. The stock quoting at Rs 34 is a good fundamental investment buy for medium term horizon.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*

*