- Healthcare and advanced manufacturing sectors are set to attract significant investments in 2024, according to Bain & Company’s latest report.
- Healthcare investments reached a record $5.5 billion in 2023, with continued growth expected in multi-specialty hospitals and pharma deals.
- Advanced manufacturing also showed strong growth, driven by government incentives and rising electric vehicle penetration.
Why is the healthcare sector attracting so much investment?
The healthcare industry is drawing substantial investor interest due to its proven resilience and long-term growth potential. In 2023, healthcare investments surged to a record high of $5.5 billion, spurred by a threefold increase in deals compared to 2022. Notable transactions included Manipal Hospital’s significant expansion through the acquisition of Columbia Asia and Vikram Hospitals. The Bain & Company report anticipates that this trend will continue into 2024, with multi-specialty and single-specialty hospitals, pharmaceuticals, and medical technology seeing robust investment activity.
What other sectors are attracting investment, and why?
Alongside healthcare, advanced manufacturing is another sector poised for substantial investment growth. This sector experienced a 20% compound annual growth rate (CAGR) from 2021 to 2023, driven by supply chain diversification, government incentives like the Production Linked Incentive scheme, and the increasing availability of large-scale assets. The rise in electric vehicle (EV) penetration also fueled investment, with EV original equipment manufacturers (OEMs) receiving significant funding. The report suggests that in 2024, packaging, electronics, and EV sectors within advanced manufacturing will continue to see increased investments.
What challenges do other sectors face?
Despite the overall positive outlook, certain sectors are facing challenges. Investments in the IT/ITeS sector declined by 65% due to elevated valuations and subdued market demand. Similarly, the new-age tech and SaaS sectors saw a 60% drop in investments as investors became more cautious, focusing on profitability and viable business models. The fintech sector also experienced a decline due to regulatory clampdowns, rising non-performing assets (NPAs) in small ticket loans, and unclear profitability paths.
In conclusion, the Bain & Company report highlights a strong investment outlook for traditional sectors like healthcare and advanced manufacturing in 2024. With healthcare set to continue its record growth and advanced manufacturing benefiting from government support and increasing EV penetration, these sectors are poised for significant advancements. However, other sectors like IT/ITeS, new-age tech, and fintech face challenges that need addressing to regain investor confidence.
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