Have you ever wondered what are equity funds? If so, read on to know all about them. Equity Funds are a type of mutual fund schemes. These schemes invest their assets in stocks of different companies.

There is a wide assortment of equity mutual funds. Some of them are the Basis market cap funds, the tax saving funds, the thematic funds, the focused funds, the contra funds and the sector funds.

Sector funds

These equity funds invest their assets in specific sectors {minimum of 80% of assets} such as FMCG, Pharma, Technology, Banking & Financial Services etc. come under sector funds.

Nowadays, many private investors are showing interest in investing equity in the Healthcare and Hospital sector.

Equity funds investment in Private hospitals

The healthcare segment in India is experiencing a burgeoning growth. Healthcare segment has been growing at a CAGR of 22% since 2016, employing 4.7 million people directly.

The ever-increasing demand for high quality healthcare has not been fulfilled by the public healthcare systems.

Healthcare has widened its scope due to technological advances, widening of service menu, and increasing coverage across the length and breadth of the country. All these factors, cumulatively, make India’s healthcare industry seem like a lucrative opportunity for investment.

The private healthcare segment in India is flexing its muscles because the public sector scores low on infrastructure and patient satisfaction. As private sector healthcare tries to expand to meet the escalating demands of the growing population, private equity investment in this sector is escalating to new heights.

Reasons that India needs equity investment in private sector hospitals

1. Growing population

The growing population of India has resulted in stretching our health infrastructure to its limits. There is paucity of beds, rooms, equipment, and skilled medical force to nurture the well-being of our masses. To build healthcare infrastructure, equity investment in this sector is necessary.

2. Health issues in the masses

India is cursed with the double burden of illness …Lifestyle- related diseases are on the rise {you must be aware that India is the diabetic capital of the world}, so are communicable or infectious diseases. With an escalating ageing population and the increased life expectancy rates, Indians will definitely need quality healthcare to take care of their well-being. Equity investments can help hospitals to meet these demands by expanding their services.

3. Demand for world-class standards

Today’s aware patients are not satisfied with anything less than the best. Patients seek innovative technology and latest and most advanced services. To meet this growing demand for world-class quality, equity investment in the healthcare sector is necessary. Equity investment can boost the improvements to medical infrastructure and procedures through technology-based optimization.

4. Scarcity of funds

Hi-tech equipment and advanced medical technology require massive funds. A sole healthcare proprietor may not have such high funds at his/ her disposal. Equity investment can remove this hindrance and make funds available for investment in top-notch medical machinery and next-generation technology.

5. Accessing network to tier -3 and rural areas

Private hospital networks are trying to make footprints in the lesser equipped parts of India so as to widen their customer base and make healthcare accessible to all. This expansion of network necessitates funds which can be gained by equity investment.

6. Changing paradigms of the market

In life, change is the only constant. Healthcare is an evolving sector. There are sudden transitions and unexpected developments. Adapting to these unpredictable circumstances is not possible without having sufficient funds. Equity investment can help hospitals handle these sudden shifts in paradigm and revise and realign themselves.

7. Planning for expansion

Over time, several hospitals need to diversify and expand to meet the demands of the masses. Equity investment can provide them with the funds to plan and implement this growth.

Benefits of PRIVATE Equity Investment in Healthcare segment

• For the investor

1. Can increase the potential for wealth creation and profits.
2. Can provide opportunity for generation of higher returns
3. Can provide a chance for portfolio diversification.
4. Can provide opportunities for capital appreciation

• For the hospital

1. Can provide opportunity to expand the hospital chains or networks throughout the country.
2. Can help in planning growth and expansion
3. Can improve the standards of healthcare
4. Can enhance healthcare infrastructure.
5. Can augment innovation and development.
6. Can make healthcare accessible and affordable to all.
7. Can improve the benchmark of hospital management and quality assurance.

Thus, it is a win-win situation for both the equity investor and the hospital.

In summary, the healthcare sector can be tremendously benefitted by equity investments. If you need any help in garnering equity funds for your healthcare services, be sure to contact Hospertz, a leading healthcare management consultancy of India.

Blog has been written by Dr. Vishal Jadhav, a veteran in the field of hospital consultancy with a rich experience of more than 20 years and founder of the Healthcare Consultancy. Firm, Hospertz.

Dr. Vishal Jadhav, Director
hospertz@gmail.com
+91 9867712705/ 9820833149