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India’s healthcare and pharmaceutical sectors raised Rs 14,811 crore through initial public offerings (IPOs) in 2024, the largest since 2019, driven by strong domestic demand amid expanding global opportunities.
According to data, key contributors to the record fundraising included Sai Life Sciences (Rs 3,043 crore), IKS Health (Rs 2,498 crore), and Sagility India (Rs 2,107 crore).
Despite fewer IPOs this year (13 compared with 21 last year), the average issue size saw a considerable jump.
The pharma industry in India is among the top sectors attracting investments.
According to the draft red herring prospectus of Sai Life Sciences, “Resilient and sustainable long-term growth has been evident in the global pharmaceutical industry, particularly driven by an increase in chronic diseases, sedentary lifestyles, growth of the geriatric population, and increasing health consciousness.”
The global pharmaceutical market, valued at $1,451 billion in 2023, is projected to grow at a compound annual growth rate (CAGR) of 6.2 per cent and reach $1,956 billion by 2028.
In India, the pharmaceutical sector is among the top ten attractive industries for foreign investment, with exports reaching over 200 countries, including regulated markets like the US and Europe.
“India accounts for 20 per cent of global generic drug exports by volume, positioning it as the largest global provider.
"Pharmaceutical exports totaled $ 25.3 billion in FY23, with March 2023 alone contributing $2.48 billion,” according to the DRHP of Zenith Drugs.
Experts feel that global drug shortages allow Indian drug makers to tap the export market.
Branded generics drive the domestic market, while export opportunities, especially in the US, have rebounded due to elevated product shortages and facility shutdowns and compliance issues.
"Emerging categories like biosimilars, GLP-1 drugs, patent expiries and injectables are poised to provide significant future growth, opportunities over mid to long term” said industry expert Shrikant Akolkar, Vice President - research, Nuvama Institutional Equities.
The hospital sector has seen a post-pandemic resurgence, as evidenced by high subscription rates for new IPOs.
Companies like Sagility India and IKS Health, which are focused on healthcare service delivery, reflect investor optimism in non-traditional segments of the healthcare ecosystem.
Upcoming opportunities in the sector include off-patent products, biosimilars, and innovative therapies.
Analysts also point to the rising demand for healthcare services in Tier-II and Tier-III towns, contributing to long-term growth.
India’s healthcare and pharmaceutical sectors are poised for consistent growth, supported by domestic consumption and export opportunities.
“The strong historical performance and promising future outlook have instilled confidence in investors, leading to increased interest and investment in the sector,” Akolkar noted.
