LeapFrog plans up to $100mn in India healthcare investments over two years

Global private equity firm LeapFrog Investments plans to invest $80 million to $100 million in India’s healthcare sector over the next two years, a top executive told Reuters, as it seeks to benefit from the rising demand for medical services.

Expanding insurance coverage and greater use of diagnostics and preventive care in a country with high rates of chronic disease have boosted healthcare spending. India’s healthcare sector was valued at about $180 billion in 2023 and is expected to grow to $320 billion by 2028, government data showed.

The healthcare and pharmaceutical sector recorded 594 M&A and private equity deals worth over $30 billion between 2022 and 2024, according to data from advisory firm Grant Thornton Bharat and the Association of Healthcare Providers India.

KKR’s deal to acquire Medicover Hospital’s India business for 1.2 billion euros ($1.4 billion) is among the latest deals.

Medicover India hospitals to be profitable in 18 months, eyes 20-25% margins

London-based LeapFrog is evaluating an investment in an asset-light, single-specialty healthcare provider, Biju Mohandas, the firm’s global head and partner for healthcare, told Reuters earlier this month, declining to provide details.

It is evaluating investing in hospitals, particularly those serving patients outside major cities, as well as specialty-care providers focused on maternal and child health, ophthalmology and oncology.

“Our investment thesis is centred on two realities — growing insurance penetration and significant disposable income with the ability to afford quality healthcare,” Mohandas said.

LeapFrog’s existing Indian investments include diagnostics provider Redcliffe Labs and digital health platform Healthify.

The firm is also exploring opportunities in India’s pharmaceutical and medical equipment sectors, Mohandas said.

LeapFrog is investing from an $808 million fund and related co-investment vehicles, giving it more than $1 billion to deploy across Asia and Africa.

“We have already deployed a significant portion of the capital, including recent investments in the Philippines and Vietnam, but we see substantial deployment opportunities in India over the next couple of years,” Mohandas said.