Despite being people-centric, the workings of the Indian healthcare industry are not immensely known to the general public. The Indian healthcare ecosystem is fragmented, unorganized, and hardly integrated. Now with several of the unique businesses within the ecosystem getting listed, more about them should be known.
The Covid-19 pandemic made healthcare one among the Street’s favorites with several hitherto unlisted businesses going public. These included India’s largest standalone insurance company recently issued a public offer to Star Health, a standalone pharmacy distributor company named MedPlus Health, a labware company supplying to pharma and diagnostic businesses of Tarsons Products, and a well-known diagnostic company operating on a public-private partnership model i.e. Krsnaa Diagnostics.
There are some more businesses waiting to hit the first market. A number one full-service contract research organization Veeda Clinical Research, an organization engaged in manufacturing medical consumables Healthium Medtech and a stents maker Sahajanand Medical Technologies have filed an offer. An integrated digital healthcare company API Holdings owning businesses across the worth chain– pharmacies, diagnostics, retail distribution, hospital supplies procurement, teleconsultation, and electronic medical records solutions for doctors has also filed its offer documents with the SEBI.
At a time when the healthcare ecosystem is facing disruptions with existing players foraying into adjacent businesses and digital players entering a number of the present segments, it’s important to own several unique industry constituents with no listed peers to urge listed on the bourses. Due to the pandemic, healthcare businesses, often backed by private equity, have a higher chance of drawing investors at attractive valuations.
Consequently, several aspects of those businesses within the healthcare value chain have become publicly known, benefiting a number of stakeholders like investors, government agencies, policymakers, doctors, patients, and patient groups still as civil society. The pandemic has been a be-careful call for the regulatory authorities. The govt. has proposed to overhaul the laws associated with drugs, cosmetics, and medical devices. The Insurance Regulatory and Development Authority of India is seeking to own a separate regulator for the healthcare market.
With more numbers and kinds of industry constituents becoming publicly traded entities, the company governance standards will warrant higher disclosure associated with the firm and industry practices, the unit economics of the business, and the challenges faced. The disclosures are available in the shape of quarterly financials, annual reports, investor presentations, and management commentary within the earning calls – providing cues to the stakeholders. The impact of any health crisis, about-face or deduction, or levy will be promptly known through the valuations of the listed companies on the bourses.
There are nevertheless some more varieties of businesses within the healthcare space that are yet to become public companies exclusively engaged in the manufacture of trade generics (low-cost unbranded generic drugs), wholesale distributors of pharmaceuticals, and third-party administrators in the insurance business, and health tech companies delivering healthcare. because the healthcare market matures and consolidates within the country, more unique businesses will access the general public markets.