Recent reports that Apollo Hospitals is looking to divest Apollo Cradle and Children’s Hospital (ACCHL), its chain of mother and child care hospitals, have surprised observers. With investors vying for a piece of pretty much any segment of India’s healthcare ecosystem, why would the largest player walk away from one of the most lucrative parts of the healthcare delivery ecosystem? The mother and childcare market is reportedly valued at Rs 30,000 crore. Especially a segment that evokes so much emotional appeal?
But the Group has perhaps decided to put emotions aside and step away. And the segment may not be as easy to crack. Apollo Cradle’s numbers are not as healthy as the group’s other segments. Apollo Cradle reported a net loss of Rs 17 lakh in FY24, with some reports calling out relatively low daily patient footfalls (~5 per day per unit (on average).
A gross Average Revenue Per Patient (ARPP) at Rs 1.05 lakh, puts it at the premium end of the scale, probably explaining the lower than expected daily footfalls but sacrificing volumes for values will only go so far.
Competition is heating up from other contenders in the mother and child care market too, like Rainbow Children’s Medicare, Motherhood Hospitals, and Cloudnine Hospitals. Private Equity players are backing a consolidation in this sphere too. Apollo Hospitals might have decided to check investor interest as the sale would allow the group to double down on its core healthcare delivery assets.
And the Apollo Group seems to have chosen the right time to make such a strategic pivot. India’s healthcare sector, as part of the overall Asia region, continues to attract investor attention. Most recently, Quadria Capital, a healthcare-focused PE firm, exceeded its original $800 million target and closed its Fund III at $1.07 billion, despite a challenging fundraising environment, highlighting strong global and Asian investor confidence in healthcare opportunities across India and Southeast Asia.
A recent BCG report, titled, The Unmissable Asia Healthcare Opportunity, points out that new models of distributed care, specialised care, and value-based HC are already emerging and will consolidate. The report also highlights a few broad trends; within health services, mid-market single-specialty players such as ophthalmology or IVF centers-catering to niche high-demand treatments and elderly care services-will drive future growth. Quadria Capital’s [ast investments, NephroPlus (which claims to be Asia’s largest dialysis chain), and Maxivision (a leading eye care chain in India) are good examples of this trend.
Similarly, the rise of digital health platforms from e-pharmacies to employee wellness programs presents a strong investment case as patients increasingly seek more convenient, tech-enabled HC options. Tracxn.com’s India Pharma & Healthcare Funding Tracker for May 2025 too reveals a major recovery in funding activity. Total funding reached $254.7 million across 10 rounds, representing a 462.36 per cent increase from April 2025 and a 44.20 per cent rise from the same month last year. While seed-stage funding dominated with 61.9 per cent of total funding, early-stage funding contributed 18.0 per cent, while late-stage funding comprised 20.1 per cent of the total. The largest deal in May was PB Healthcare (secured funding of $156 million) followed by Vetic ($26.2 million), Pharmazz ($25.0 million), CureBay ($21.0 million), The Good Bug ($11.9M), DentCare ($10.6 million).
However, the BCG report also points out that despite being home to 60 per cent of the global population, Asia accounts for only 22 per cent of global healthcare spending, with chronic conditions such as diabetes and cancer disproportionately affecting the region. Thus, the opportunity is immense, with foreign direct investment (FDI) in healthcare doubling since 2008, and the APAC healthcare market expected to reach ~$5 trillion by 2030, contributing 40 per cent to global healthcare sector growth.
Apollo Hospitals’ parting with Apollo Cradle could be seen as a sign of the maturing mindset of India’s healthcare promoters, who now seem ready to take smart, unemotional decisions if it benefits the larger group and gets the right price. Will we see more such deals in the pipeline?
VIVEKA ROYCHOWDHURY, Editor
viveka.r@expressindia.com
viveka.roy3@gmail.com