Merger and acquisition activity in India’s healthcare sector has remained buoyant so far this year and back-to-back successful initial public offerings have indicated strong investor appetite, although private equity and venture capital deals have slowed in line with other sectors.
The January-August period of this year recorded 66 M&A transactions, compared with 67 a year earlier and 69 in the same period of 2014, according to VCCEdge, the data research platform of News Corp VCCircle.
“PEs will keep looking at exits as an option via M&As, which will remain buoyant. We don't see any negative on this side,” said Amit Varma, co-founder and managing partner at healthcare-focused private equity firm Quadria Capital.
Of the 66 M&A transactions during the period, 38 were domestic, eight were inbound and 13 were outbound. The biggest M&A deal in the space was China's Shanghai Fosun Pharmaceuticals (Group) Co. Ltd's acquisition of a majority stake in Hyderabad-based Gland Pharma Ltd for up to $1.26 billion.
The IPO marathon for healthcare companies began with Syngene International Ltd, the research and development subsidiary of Indian biopharmaceutical major Biocon Ltd, in July 2015. The company made a strong debut on the stock exchanges, listing at a premium of 18% to its issue price of Rs 250 in August last year. Its share price has hit a high of Rs 510.