Hari Buggana, the founder and chairman of healthcare and pharma-focused private equity fund InvAscent, has argued that drawing a direct link between private equity ownership of hospitals and higher treatment costs represents an oversimplification — a position he advanced as broader questions persist around rising medical expenses and mark-ups applied to medicines and devices.
In a television interview, Buggana contended that capping what hospitals earn from medicines and medical devices carries the risk of deterring investment in facilities serving rural and underserved areas, and that compensation for senior doctors could face downward pressure as a result.
Responding to a question about whether investor return expectations drive up patient treatment costs, Buggana noted that those operating on the healthcare investment side carry a responsibility to weigh that concern carefully, given that the people at the centre of those decisions are patients rather than ordinary consumers.
Buggana further argued that attributing rising healthcare costs solely to private equity ownership oversimplifies a more layered picture, noting that most of India's prominent hospital groups — including Apollo, Manipal, Max, Fortis, Narayana, Medanta, and KIMS — trade on domestic stock exchanges, with Temasek standing as the lone foreign controlling investor, holding that position at Manipal alone. Hospitals backed by private equity funding hold a share of India's total bed capacity that sits below the five percent mark.
Among the forces pushing medical expenses upward, Buggana cited the capital outlays tied to hospital infrastructure, the burden of regulatory compliance, the growing intricacy of patient cases, and the rising wages demanded by doctors and nurses. He noted that those financial pressures hold across hospital ownership structures — whether control rests with an individual promoter, a listed company, or a private equity firm.
Buggana noted that placing caps on hospital margins for medicines and devices would alter the way such facilities structure their day-to-day operations. Compensation for subspecialty physicians and senior-level consultants — a staffing tier that accounts for a notable portion of tertiary hospital operating budgets — could come under pressure to contract.
Reaching into tier 2 and tier 3 cities — markets that have historically received far less infrastructure and service attention than metros and tier 1 centres — stands out as a domain where growth plans face notable headwinds, Buggana said. Analysts have noted that any attempt by hospitals to redistribute margins into other billing categories — such as accommodation fees or operating-theatre costs — would likely draw regulatory scrutiny and potentially bring those line items under price controls as well.
Pricing of healthcare delivery assets in the mid-market segment has trended upward at a measured pace, according to InvAscent's observations. Businesses posting EBITDA under Rs 150 crore tend to be thinly represented on listing platforms.
Entry-level purchase multiples in Fund III hovered near 10x EV/EBITDA, a figure that Buggana indicated likely drifted one or two turns higher by the time Fund IV deals were being struck. Pricing pressure in healthcare deals valued above $100 million has been tied to the activity of large-cap private equity firms.
Pharma ventures have consistently absorbed more than half of InvAscent's deployed fund capital by value, with healthcare delivery accounting for roughly a quarter to three-tenths of the remainder, and the balance spread across medical devices, healthtech, and adjacent sectors including specialty ingredients and animal health.
Regarding the China+1 manufacturing shift, Buggana described India as a potential gainer from the trend, while noting that the transition remains at an early point. Pathways into advanced-chemistry work, higher-value manufacturing, and integrated CRDMO partnerships represent territory where India's capabilities position it to compete, he said.
Homegrown producers of medical devices are pushing into the higher-complexity Class C and D product tiers, broadening their footprint beyond lower-risk equipment. Three factors tied to the broader industry ecosystem shape the path forward, according to Buggana: reliance on imported parts, how well a brand is trusted, and the strength of its post-purchase service network.
Spanning three vehicles — Fund I, Fund II, and Fund III — InvAscent has built a portfolio of 33 holdings, with 20 of those positions already wound down. Seven portfolio positions have been established under Fund IV so far, leaving the vehicle only partially committed at this stage.
Demand from investors for the Symbiotec IPO ran to more than 75 times the available allocation, marking the portfolio's latest exit. Three public listings drawn from the Fund III portfolio are currently moving through the preparation process.
A fifth fund under the InvAscent banner is targeted for a rollout in the latter half of 2027. When co-investments are factored in, the firm appears to have put roughly $400 million to work through Fund IV. Fund IV drew commitments from a number of home-market limited partners, with total subscription requests running past the vehicle's target capacity.
