Dec 20Featured ArticleIssue

Healthcare Leader: VP Rajan

Director, Veda Corporate Advisors

With the onset of COVID-19 pandemic, investors took a wait and watch approach through the second quarter (April-June) of the current year. While few transactions moved ahead slowly given the macro situation, the change in business dynamics due to a series of lockdowns also led to deferment of few other transactions. However, the overall pharmaceutical sector remained resilient through this phase, thanks to the discomfort across the globe arising from significant dependence on China for the pharma requirement.While the pharma sector continues to out beat other sub-segments of healthcare in terms of investor interest, there is an indication of green shoots in select pockets, especially medical devices and diagnostic services, which have been the beneficiary of a large number of COVID testing, increased health and immunity awareness coupled with the need for a drastic increase in healthcare infrastructure.

KKR’s acquisition of JB Chemicals, Carlyle’s investment in Piramal Pharma and Sequent, CVC investment in HCG, PAG led PE funds consortium investment in Anjan Drugs were some of the big deals that happened since April 2020. As you might have noticed, the list is dominated by pharma deals led by marquee funds.We believe that the situation continues to improve each month with phased unlocking of the economy and many healthcare businesses reverting to pre-COVID levels. While pharma deals will continue to dominate through the first half of next year, we see deals in diagnostic services, medical devices and healthcare delivery likely to revive strongly from the second quarter of the next year. With medium-term to long-term outlook, healthcare companies are likely to work towards beefing up the infrastructure, thereby kick-starting the new cycle of investment for growth.

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