Navigating The IVF And Mother & Child Landscape In India

The Indian healthcare sector has emerged as a compelling arena for Private Equity (PE) investors

Registering a remarkable six-fold jump in total investments to $4 billion over the past five years, it is certainly a great achievement. While a substantial portion of these investments has been channelled into multi-specialty and super-specialty hospitals, the single-specialty segment which garnered comparatively lesser share is now witnessing strong momentum.

The single-specialty segment is poised to become an attractive prospect for the forthcoming decade. A confluence of factors such as superior EBITDA margins, an asset-light operational model, rapid scalability, focusing on evolving lifestyle trends, and a commendable return on capital employed (ROCE), has contributed to it.

Amidst the spectrum of single-specialty domains, the Women’s Health, including In-Vitro Fertilization (IVF) and Mother & Child segment stands out as an area which is on the cusp of transformative growth.

Traditionally, infertility treatments carry social stigma in India. However, the scenario seems to be rapidly changing with an onset of various IVF clinics and special Mother and Child focussed hospitals that are working towards building social awareness, providing comfortable and advanced treatment options in India. Young couples, with rapidly changing lifestyles, increased disposable incomes, are further opening up to such treatment options. Notably, the Indian IVF market remains significantly underpenetrated, accounting for only 2,50,000-2,75,000 treatment cycles annually. This translates into a smaller pie, representing only one-tenth, compared to the global counterparts. One in six people, or around 17.5% of the adult population, globally are affected by infertility in their lifetimes as per a new report by the World Health Organisation (WHO).

The domestic market consists of approximately 2,800-3,000 IVF clinics largely dominated by local or regional clinics, thereby presenting a major opportunity for regional brands to expand their footprint and establish a prominent Pan - Indian presence. It is estimated that the Indian IVF market is poised to reach a valuation of $2.8-3.0 billion by 2030, at a robust compound annual growth rate (CAGR) of 16-17% between FY22 and FY30.

This remarkable growth trajectory is supported by various scenarios conducive to organic and inorganic growth. The IVF sector has witnessed strong interest from large PE players and strategic investors, attracting more than $900 million in the past 12-18 months. Some of the recent transactions during this period were Kedaraa Capital's investment in Oasis, Baring Private Equity acquiring a majority stake in Indira IVF, Nova IVF securing a majority stake in South End IVF and Wings Hospital, and Verlinvest obtaining a majority stake in Ferty9 Fertility Center. These deals highlight the industry’s appeal and the investors’ confidence in various IVF establishments.

The new Assisted Reproduction Technology (ART) and Surrogacy Act, which came into effect in 2022, has made this industry more attractive to corporate investors. As lifestyle patterns evolve and awareness increases, the demand for infertility treatment is expected to surge, providing a major opportunity for the Indian IVF units to establish themselves as key players in the national as well as global landscape.

About the Author - 

Mihir Kapadia - Associate Director – Transaction Advisory & Consultancy Services at Wodehouse Capital.


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