Smaller Cheques, Sharper Bets: Healthcare Deals Stay Steady in Q1 2025

Smaller Cheques, Sharper Bets: Healthcare Deals Stay Steady in Q1 2025

India’s pharmaceutical and healthcare sector opened 2025 with a stable stream of deal-making, even as overall investment values trended lower. According to Grant Thornton Bharat’s latest Pharma and Healthcare Dealtracker for Q1 2025, the industry recorded 67 transactions worth a combined $2.1 billion. While this reflected only a slight 3% dip in deal volume from the previous quarter, it marked a sharp 70% drop in value—largely due to the absence of blockbuster transactions like the $5 billion Aster DM–Quality Care India merger in Q4 2024.

Despite the decline in dollar terms, experts suggest the market is recalibrating rather than retreating. “Investor appetite remains strong. We’re seeing more targeted capital flows into scalable, regulated platforms,” said Bhanu Prakash Kalmath, Partner and Healthcare Services Industry Leader at Grant Thornton Bharat.

Strategic Shifts in Focus

Private equity remained active, contributing 42 deals worth $562 million—close to the previous quarter’s $603 million. While billion-dollar deals were notably absent, the market is clearly leaning into early-stage, asset-light investments. These include tech-forward ventures in diagnostics, chronic care, and wellness.

Healthtech stood out as the busiest segment by deal count, making up over 25% of all activity. Investors zeroed in on decentralised, consumer-driven care models—ranging from AI-powered diagnostic platforms to fertility tech—underscoring the sector’s digital shift.

On the other hand, the pharmaceutical and biotech sector captured the bulk of deal value. With 17 transactions totaling $1 billion, the space saw major moves such as Intas Pharmaceuticals’ $558 million acquisition of Coherus Biosciences’ Udenyca. These plays point to India's rising ambition in biologics and complex generics for the global market.

Consolidation Continues

M&A activity held its ground with 25 deals amounting to $1.5 billion. Outbound deals dominated value creation, making up more than 85% of total M&A value. Noteworthy cross-border acquisitions—like Sun Pharma’s $355 million deal for U.S.-based Checkpoint Therapeutics and Zydus Lifesciences’ acquisition of France’s Amplitude Surgical—reflect India’s strategic interest in international R&D and specialty therapeutic segments such as oncology and orthopedics.

Domestically, consolidation in hospital networks and diagnostics remained a key trend. Kotak Alternate Asset Managers’ $111 million investment in Neuberg Diagnostics was among the top private equity deals, signaling continued confidence in diagnostic platforms.

Public Markets Show Confidence

Public markets mirrored this optimism. Three healthcare IPOs raised $503 million in Q1 2025, joined by a $74 million qualified institutional placement by a hospital chain. These listings—spanning pharma, devices, and healthcare delivery—underscore institutional belief in asset-backed healthcare models.

Still, caution lingers. The report flagged global risks, including potential U.S. tariff measures and a strong dollar, which could affect outbound expansion plans and tighten liquidity.