Healthcare Dealmaking Slows Nevertheless Capital Chases Scalable, Specialised Bets: Report

India’s pharmaceutical and healthcare sector witnessed a giant slowdown in deal train throughout the second quarter of 2025, with complete transaction value plunging 62% from the sooner quarter, in response to a model new report from Grant Thornton Bharat. The number of presents moreover fell, albeit further modestly, to 57 from 67.

Complete deal value stood at $1.3 billion, sharply down from $2.1 billion in Q1 2025. Whereas the decline is partly attributable to the absence of mega-mergers, the data moreover shows a broader shift in capital being allotted away from expansionist performs and in the direction of further surgical bets on specialised, scalable platforms.

“The moderation in dealmaking this quarter isn’t a shock given the extreme base set in late 2024 and early 2025,” acknowledged Bhanu Prakash Kalmath S J, Companion and Nationwide Chief – Healthcare at Grant Thornton Bharat. “What we’re seeing now may very well be a shift from growth for growth’s sake to consolidation, focus, and institutional readiness.”

A post-boom actuality take a look at

The slowdown marks a reversal from the frothy dealmaking seen over the past 12 months. In This fall 2024, complete deal value had surged to $6.9 billion, pushed largely by the $5 billion Aster DM–Top quality Care merger. That single deal accounted for nearly 80% of the quarter’s M&A worth, setting a extreme watermark that has not been matched since.

In distinction, Q2 2025 featured no presents above $500 million, aside from Biocon’s $523 million licensed institutional placement (QIP)—a fundraise pretty than an acquisition. With out big anchor transactions, complete values compressed no matter common underlying deal flow into.

M&A volumes held up, with 23 presents throughout the quarter—solely two fewer than in Q1—nonetheless complete disclosed value fell a staggering 86% to $208 million. The drop moreover shows restricted transparency: virtually three-fourths of M&A presents didn’t disclose deal value.

Pharma and biotech lead in value, not amount

Whatever the broader pullback, pharma and biotech remained in all probability probably the most value-heavy part, accounting for 40% of Q2 deal value ensuing from Biocon’s QIP alone. Previous that, the sector seen focused consolidation in formulations, contract manufacturing, biologics, and nutraceuticals.

Notable presents:

• Emcure Prescribed drugs acquired a 20% stake in Zuventus Healthcare for $84 million.
• Photo voltaic Pharma picked up an 18% stake in Pharmazz Inc, a US-based biotech company, for an estimated $25 million—a unusual outbound switch in an in every other case domestically concentrated quarter.
• Chromo Labs acquired Cohance Lifesciences’ CR Bio unit, signalling curiosity in CDMO capabilities.

On the cross-border entrance, train softened. Outbound M&A fell from seven presents to three, with value dropping from $1.3 billion to easily $35 million. Inbound train was non-existent for the first time since Q3 2022.

Private equity focuses on depth, not breadth

The private equity and enterprise capital (PE/VC) panorama confirmed further resilience. Deal volumes fell to 33 from 42, nonetheless complete value inched as a lot as $580 million, led by two high-conviction bets:

• Primary Catalyst, along with PB Fintech and an undisclosed investor, invested $218 million into PB Healthcare Firms.

• Introduction Worldwide deployed $175 million into Felix Prescribed drugs, a platform in pharma manufacturing.

These two presents alone accounted for nearly 68% of the quarter’s PE value, highlighting a capital focus growth the place merchants are backing fewer, nonetheless larger, further institutionalised platforms.

Completely different mid-sized investments included:

• CureBay Utilized sciences ($21 million) and Mosaic Wellness ($20 million), every digital-first healthtech startups.

• Paras Healthcare acquired a $20 million infusion from 360 One WAM, reinforcing PE curiosity in regional hospital chains.

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Hospitals keep the favourite

All through every M&A and PE, hospitals remained in all probability probably the most institutionally favoured asset class. Merchants are drawn to their scalability, regular demand patterns, and clear monetisation paths—whether or not or not via working leverage, consolidation synergies, or public listings.

The sector is evolving alongside two distinct tracks: multispecialty chains consolidating to comprehend scale, market share, and IPO readiness. Single-speciality suppliers are growing via asset-light, replicable fashions in Tier II and Tier III cities.

M&A presents akin to PVP Ventures’ 56% stake in Optimus Oncology and PE bets on PB Healthcare signal continued investor notion in hospitals as high-visibility, medium-risk performs.

The client-facing facet of healthcare—comprising diagnostics, healthtech, and wellness—accounted for nearly half of all Q2 transactions by amount. The momentum proper right here is pushed by three converging forces:

• Rising consumer consciousness and health-seeking behaviour
• Progress in preventive care and early prognosis
• Acceleration of digital and home-based provide fashions.

M&A train in diagnostics focused on regional consolidation. Metropolis Healthcare’s acquisition of Dr. Ahuja’s Pathology and Imaging Centre is a working instance. PE merchants are moreover warming to structured digital platforms with specialised decisions—akin to energy care, psychological effectively being, and gender-specific wellness—over generic effectively being apps.

Wellness, prolonged an appendage of consumer effectively being, is beginning to emerge as a standalone funding theme, notably in gut effectively being, D2C dietary dietary supplements, and hormone-based therapies. The part stays small in value, nonetheless deal flow into is rising and turning into further centered.

Whatever the sharp drop in quarterly values, analysts and merchants see no objective to panic. As an alternative, they interpret the numbers as part of a maturing funding cycle, the place capital is popping into further discerning.

“There’s nonetheless a strong urge for meals for healthcare, nonetheless the bar has moved,” acknowledged a confederate at a worldwide private equity company. “We’re earlier the spray-and-pray part. Now it’s about vertical specialisation, platform integration, and visibility into monetisation.”

Primarily based on Grant Thornton, the medium- to long-term outlook stays bullish. The combination of a giant underserved inhabitants, bettering care infrastructure, and digital penetration will proceed to attract funding. Nevertheless merchants are susceptible to prioritise:

• Administration presents over minority stakes
• Dwelling consolidation over outbound forays
• Platforms with IPO potential over early-stage experiments.

“India’s healthcare story isn’t cooling—it’s getting further disciplined,” acknowledged Kalmath. “The principle focus is shifting to top quality over quantity, depth over breadth.