KKR is not done with healthcare in India. Its latest bet: Kerala’s Baby Memorial

Private equity giant KKR on Monday scooped up a controlling stake in Kerala-based Baby Memorial Hospital (BMH), doubling down on India's healthcare sector where it has made a series of investments in the recent past.

Financial details of the acquisition were not revealed; however, a person familiar with the deal said KKR's KKR's Asian Fund IV bought 70% stake in BMH for ₹2,000 crore, valuing the multi-specialty hospital chain at ₹ ₹2,500 crore.

The investment will help the hospital chain's pan-India expansion and medical infrastructure, the private equity firm said.

The deal is part of KKR’s effort to increase its exposure to India’s growing healthcare sector after making several investments in the space including healthcare revenue solutions provider Infinx and injectables company Gland Pharma. The US private equity fund's India portfolio also includes drugmaker JB Chemicals and Pharmaceuticals Ltd, health tech firm Infinx, and PHC. Recently, KKR acquired a controlling stake in medical device maker Healthium.

According to the Bain India Private Equity Report 2024, healthcare investments in India hit a record $5.5 billion in 2023, with 20% of the capital raised for healthcare allocated to single-specialty hospitals.

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Founded in 1987 by K.G. Alexander, BMH operates 1,000 beds across Kozhikode and Kannur in Kerala, offering a range of services from cardiology to orthopaedic care.

Akshay Tanna, KKR's head of India private equity, emphasized the firm's strategic focus on India's healthcare, aiming to extend BMH's reach to more patients across the country.

“We are pleased to be strategic partners with Dr K. G. Alexander and family through this investment, which will aid BMH in expanding its network of hospitals and continuing to invest in medical infrastructure so that its medical services can reach more patients in India,” Tanna added.

KKR had sold its Max Healthcare stake in 2022 for around ₹9,400 crore, marking its largest exit from an Indian firm.

KKR has also made investments in the consumer sector in India, with a nearly 1.42% stake in Reliance Retail in September 2023. Other notable India investments include supply chain firm LEAP India and renewable energy firm Serentica.

In November last year, the private equity firm had collected $2.8 billion for its second global impact fund dedicated to advance sustainability and social equity.

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KKR's Kerala hospital deal comes amid a surge of major investments in India's healthcare sector by leading global funds.

Last year, Blackstone, the world’s largest private equity firm, completed a $1 billion acquisition of Care Hospitals and KIMS Health. Singapore's state investment firm Temasek secured a controlling stake in Manipal Hospitals, while Swedish buyout firm EQT acquired Indira IVF. This year, General Atlantic followed suit by acquiring the hospital chain Ujala Cygnus. Last month, private equity firm Olympus reportedly sold a 10% stake in Aster DM Healthcare

According to estimates by Bain & Co. and HealthQuad, India’s healthcare innovation market may double to $60 billion by fiscal year 2028, driven by increased consumer demand, changes in the global healthcare value chain, advancements in Indian scientific and technological capabilities, and favourable regulatory conditions.