Tag: Alternative Therapies

Alternative Therapies

Why are Indians Losing Sleep? How do We Regulate Sleep?

Why are Indians Losing Sleep

Introduction

There are various sleep guidelines for adults from various experts and institutions that vary from 7 to 9 hours per night, every night. However, as we will discuss here, this is not be adequately being followed and complied by individuals in India and around the world. There are several individual (such as personal, socio-demographic, lifestyle, health) and work related (psychosocial and job) factors that affects and inhibits regular sleep patterns of individuals (see Box).

Factors Affecting Sleep - Lifestyle and health factors
Factors Affecting Sleep – Lifestyle and health factors
Factors Affecting Sleep - Personal and socio-demographic factors
Factors Affecting Sleep – Personal and socio-demographic factors
Factors Affecting Sleep - Workplace psychosocial and job factors
Factors Affecting Sleep – Workplace psychosocial and job factors

In our 2024: Healthcare & Lifesciences Investment Manifesto – Top 40 Future Bets, our bet #39 discussed about Sleep Biology. See 2024 – India Healthcare And Life Sciences Investment Manifesto | Kapil Khandelwal KK for more details. We believed that The traditional “one-size-fits-all” approach to sleep is becoming obsolete and we need to reimagine solutions under “Sleep Biology” given that we all understand the consequences of lack of proper sleep. Our hunch was that Gen Z and Millennian in India are more sleep deprived. This has turned out to be true. Meta analysis of all the research papers on Indians sleep or lack of sleep patterns is in the Annexure 1. Moreover, the recent report from various and our inhouse analysis gives a very grim view of why Indians are losing sleep?

Indian Sleeping Statistics

The chart below summarises the impact of lack of sleep among Indians and some of the causes for it. We will discuss the impact of lack of sleep later.

Indians Sleeping Statistics in a (S)nap
Indians Sleeping Statistics in a (S)nap

India Macro Sleep Economics

Sleep deprivation significantly impacts India’s Human Capital Index (HCI). Chronic sleep deprivation can lead to reduced cognitive abilities, lower productivity, and increased absenteeism. These factors collectively diminish the overall quality of human capital, which is crucial for economic growth and development. The chart below shows the overall impact to GDP for various countries, including India:

Macro Sleep Economics (Impact on GDP due to Lack/Less Sleep)
Macro Sleep Economics (Impact on GDP due to Lack/Less Sleep)

India is at risk of losing of GDP, an opportunity cost, as a nation over losing sleep of its citizens and this will be a huge issue in the future.

How do We Regulate Sleep? The National Sleep Monitoring and Regulatory Authority (NSMRA)

Given the loss of sleep and India’s GDP, there is a need to set up a National Sleep Monitoring and Regulatory Authority (NSMRA). This Authority will be empowered to ensure that there is a proper and enabling environment to assure that the issues emerging out of lack of citizen’s sleep are mitigated. The Authority will align with various health and labour initiatives and regulations prevailing in India. Some of the objectives, though not exhaustive, of NSMRA would be:

Indian Citizen Lifestyle Ethos and Culture

  • Set a consistent wake-up time
  • Limit time spent in bed on activities other than sleeping
  • Do not stay in bed unless asleep
  • Limit the use of electronic devices before bedtime
  • Limit the consumption of substances which may impair sleep quality
  • Address stressful issues long before bedtime
  • Exercise and alignment with

Labour and Employment Laws Modifications

  • Recognise the importance of sleep and the employer’s role in its promotion
  • Commit to build a culture to helping employees achieve better sleep outcomes

Work Environment Regulatory Guidance and Monitoring

  • Minimise variability in working hours and maximize employees’ control
  • Discourage the extended use of electronic devices
  • Address physical workplace risk factors
  • Combat workplace psychosocial risks
  • Provide facilities and amenities that help employees with their sleep hygiene
  • Design and build brighter workspaces
  • Support health workers in providing sleep-related help
  • Encourage employers to pay attention to sleep issues
  • Make use of existing workspace mandates and their enforcement
  • Introduce later school starting times
  • Raise general awareness of the benefits of sleep

Let’s look forward to Healthy India and Wealthy (GDP Opportunity Cost Savings)

Annexure 1

Sr No. Author Study Design Participants Group Sample Size(n) Age(Mean+SD)
/Age Group		 Assessment Tool Sleep Disorder Addressed JBI
Score (0-10)
1 H. K. Aggarwal et al., 2017 Cross sectional study CKD stage III to V patients 200 50.11+13.99 PSQI  Insomnia 7
2 S. Ahmad et al., 2013 Cross sectional study Adults with CKD 104 54.17+12.96 ISI, STOP-BANG  Insomnia 9
3 Jain et al., 2017 Cross sectional study Type-2 diabetes patients 50 48.25+19.05 ISI  Insomnia 7
4 Dahale et al., 2020 Multicentre cross sectional survey Elderly patients attending PHCs 1574 68.6+6.3 ISI  Insomnia 8
5 Uvais et al., 2021 Cross sectional study Nurse and other staff 347 29.12+6.85 ISI  Insomnia 7
6 Panda et al., 2012 Observational cross sectional study Healthy subjects accompanying patients 1050 35.1+8.7 ESS, PSQI RLS,
Insomnia		 9
7 Shivashankar et al., 2017 Cross sectional study Healthy participants 16287 42.03+12.43 Sleep Habbits questionnaire, ESS  Insomnia, EDS 6
8 Katyayan et al., 2019 Cross sectional study Healthy subjects 850 44.68+10.44 ESS, BQ, STOP
BANG 		 Insomnia 8
9 Dewan et al., 2022 Questionnaire-based survey study Dental students 1115 21+1.8 SLEEP-50
questionnaire (that had 50 questions)		 OSA,
Insomnia		 6
10 Jain et al., 2020 Cross sectional study Students University of Rajasthan and affiliated colleges 954 23.81+3.72 ISI  Insomnia 7
11 N. Kumar et al., 2022 Cross-sectional study General People 1596 39.76+13.1 Standard questionnaire RLS,
Insomnia		 4
12 Khan et al., 2018 Epidemiological study Adult population of a district 1700 39.4+13.9 ISI, door to door survey Insomnia 9
13 Sreedharan et al., 2016 Cohort study PSG proven OSA patients 152 53.81+12.01 PSG Insomnia, EDS 7
14 Jaisoorya et al., 2018 Cross sectional study General patients at OPD(PHCs) 7017 41.4+11.1 ISI  Insomnia 8
15 Panda et al., 2018 Observational study Patients with definite and probable ALS 40 56.6+9.4 ESS, PSQI  RLS,
Insomnia		 6
16 Mondal et al., 2018 Observational cross sectional study Psychiatric outpatients 500 42.2+15.3 ISI  Insomnia 7
17 Jain et al., 2014 Prospective study Traumatic brain injury patients 204 33.34+12.9 ISI  Insomnia 6
19 Naik et al., 2021 Prospective observational study Patients aged >18 years with laboratory- confirmed COVID-19 1234 41.6+14.2 Interviews conducted by trained residents Insomnia 7
20 Tomar et al., 2018 Cross sectional Post-traumatic brain injury patients 100 35.07+12.88 ISI, PHQ-9  Insomnia 9
21 A. Kumar et al., 2021 Cross-sectional study Patients with chronic liver disease 131 48.7+12.31 PHQ-9, PSQI  RLS,
Insomnia		 8
22 Devaraj et al., 2013 Cross sectional Patients with a recent Myocardial Infarction 44 57.5+10.44 PSG, ESS, BQ OSA,
Insomnia		 8
23 Ramakrishnan et al., 2012 Descriptive study General patients visited sleep centre 1765 All age patients PSG OSA,
Insomnia		 6
24 N. Kumar et al., 2021 Cross-sectional study Parkinson’s disease  832 66.9+18.39 Online survey with validated questionnaire RLS,
Insomnia		 6
25 Jasti et al., 2018 Cross-sectional study Parkinsonism patients 168 65.3+12.8 PSQI, ESS, PDSS-
2 		 OSA, EDS,
Insomnia		 7
26 Kishan et al., 2021 Cross Sectional observational Chronic heart failure patients 103 62.65+11.8 ESS,  STOP-BANG,
BQ		 OSA 7
27 Shanmugam et al., 2015 Cross-sectional prospective observational study CKD patients 302 All age patients BQ OSA 7
28 A. Singh et al., 2021 Cross sectional study Type 2 diabetes patients 149 63.42+12.31 STOP-BANG  OSA 9
29 Viswanathan et al., 2017 Cross sectional study Type 2 diabetes patients 203 54+8 AHI OSA 6
30 Malik et al., 2017 Cross sectional study Type 2 diabetes patients 62 60.82+11.34 PSG OSA 8
31 Goyal et al., 2018 School-based cross- sectional School students 1346 6.81+2.18 SRBD scale OSA 9
32 S. K. Sharma & Sreenivas, 2010 Cross sectional study Middle aged urban Indians  in South Delhi 351 43+13.2 PSG OSA 8
33 S. K. Sharma et al., 2010 Cross sectional study Individuals of either gender aged 30-65 years 365 47.5+13.8 Validated questionnaire, PSG OSA 7
34 Shailly Saxena, 2006 Observational cross sectional study Individuals above 18 years of age 1188 44.27+10.79 Sleep questionnaires OSA 7
35 Joseph et al., 2020 Cross sectional study Pregnant women 214 27.2+4.7 STOP-BANG,  ESS  OSA 5
36 Choudhury et al., 2019 Cross sectional study Rural community of Odisha 200 50+16.3 BQ  OSA, EDS 6
37 Pinto et al., 2018 Observational cross sectional study Adult population  321 39.43+15.6 ESS, Modified BQ OSA 8
38 K. Aggarwal et al., 2021 Cross-sectional and observational study Undergraduate college students 493 20.3+1.53 PSQI OSA 7
39 Agrawal et al., 2011 Cross sectional study Patients with and without OSA 272 45.29+8.96 PSG OSA 8
40 Surya Kant, 2019 Prospective observational study Patients of Pulmonology Outpatient Department 48 All age patients PSG OSA 6
41 Anand et al., 2021 Cross sectional prospective study Children with Down syndrome 53 7.4+3.47 PSG OSA 4
42 Nanaware et al., 2006 Retrospective study Suspected sleep disordered breathing children under 18 years 56 11.5+5.13 PSG OSA 4
43 Kaswan et al., 2021 Prospective cross section Diabetes mellitus patient 362 55.7+10 STOP-BANG,  ESS  OSA 9
44 Devaraj et al., 2017 Prospective cohort Patients underwent non-cardiac surgery 182 48.9+14.41 PSG,  STOP-BANG  OSA 9
45 Lorenzoni et al., 2019 Observational cross sectional study Obese children 45 10.5+0.75 PSG OSA 6
46 Dixit et al., 2018 Cross sectional study Adult patients of bronchial asthma 50 48.16+14.9 PSG OSA 6
47 Tripathi et al., 2019 Cross sectional study Elderly completely edentulous patients 183 62.5+1.97 PSG, ESS  OSA 9
48 Reddy et al., 2009 Cross sectional, community based study Middle-aged urban of South Delhi 2505 47.5+13.8 PSG OSA 9
49 S. K. Mahajan et al., 2021 Cross sectional study Patients with acute coronary syndrome  66 57.7+11.1 PSG OSA 8
50 Prasad et al., 2017 Comparative study Subjects who underwent polysomnography at sleep lab 210 46.5+13.7 PSG OSA 8
51 Kamgo et al., 2022 Prospective observational study Interstitial Lung Disease patients 41 55.5   10 PSG OSA 6
52 R. Kumar et al., 2013 Cross Sectional observational Patients with asthma and COPD 400 35.8   7.9 ESS, BQ OSA 8
53 Sehgal et al., 2016 Cross sectional study Patients with metabolic syndrome  50 47.1   6.6 PSG, ESS  OSA 6
54 Nair et al., 2022 Cross sectional study Patients with sleep disordered breathing 142 49.7   14.6 Level 1 PSG OSA 10
55 Priyadarshini et al., 2017 Observational cross sectional study Obese patients seeking bariatric surgery 27 42.4   10.5 PSG, ESS, BQ OSA, EDS 7
56 Nattusami et al., 2021 Cross sectional study Patients with stable COPD 301 59.6   10 PSG, ESS  OSA, EDS 10
57 Shoib et al., 2017 Cross-sectional study Patients suffering from depression 182 54.89   12.93 PSG OSA 10
58 Utpat et al., 2020 Prospective observational study Interstitial lung disease patients 100 56.44   20.52 PSG OSA 9
59 Bhaisare et al., 2022 Prospective observational study Diagnosed lung cancer patients 30 55   8 PSG, ESS  OSA 8
60 Agrawal et al., 2013 Cross sectional study Patients of ASA I-III scheduled for elective surgical procedures under anesthesia 204 42.7   15.08 STOP-BANG  OSA 7
61 Kaul et al., 2001 Cross Sectional observational study Primary sleep disturbances patients 60 46.36   7.89 PSG OSA 7
62 Jain & Sahni, 2002 Prospective observational study Children adenoidectomy and/or tonsillectomy 40 8   3.15 PSG OSA 6
63 Ghosh et al., 2020 Cross sectional study Population study 1000 47   13 BQ OSA, EDS 7
64 Tripathi et al., 2018 Cross Sectional observational study Non-obese male subjects 120 45   7.8 PSG OSA 5
65 P. Singh et al., 2022 Prospective study Coronary artery disease patients 100 35.14   4.35 PSG OSA 7
66 Dubey et al., 2018 Cross sectional study Male Driving License recipients 542 31.8   13.2 STOP-BANG   OSA 9
67 Mathiyalagen et al., 2019 Cross sectional study Patients attending a non-communicable disease clinic 473 51   11.34 Pre-tested semi- structured questionnaire OSA 10
68 M. Kumar et al., 2021 prospective cross- sectional study Patients with cirrhosis 1098 48.3   10.5 PSQI, ESS  OSA, EDS 10
69 Rohatgi et al., 2018 Preliminary study Patients suffering from schizophrenia spectrum disorder 43 32.2   10.1 Berlin Questionnaire OSA 8
70 L. Ahmad et al., 2020 Prospective, cross- sectional hospital- based study Adolescent patients who reported to Orthodontic OPD 213 16   3.4 STOP-BANG   OSA 9
71 Selvaraj & Keshavamurthy, 2016 Cross sectional study Parkinson’s Disease patients 50 57.16   6.6 PDSS, ESS  OSA 6
72 Bhagawati et al., 2019 Cross-sectional study Patients with CKD who were >18 years of age 300 47.58   15.04 IRLSSG rating scale RLS 10
73 Pinheiro et al., 2020 Cross sectional study Type-2 diabetes 210 56   13.5 IRLSSG rating scale RLS 6
74 R. Gupta et al., 2017 Population based door to door study Subjects 18 and 84 years in Himalayan and Sub-Himalayan region 1689 35.2   10.9 Cambridge-Hopkins RLS diagnostic questionnaire RLS 9
75 Rangarajan et al., 2007 Cross-sectional, questionnaire-based study Adult residents of Bangalore 1266 49.4   24.4 Face-to-face interview, IRLSSG scale RLS 7
76 Bellur et al., 2022 Cross-sectional observational study College students 4211 18   1.48 PSQI, ESS  RLS 7
77 Joseph et al., 2022 Cross-sectional study General population of Mangalore 202 29   13 PSQI  RLS 6
78 R. Gupta et al., 2012 Cross sectional study Patients who presented with insomnia or leg pain 653 39.86   12.8 IRLS Hindi version RLS 7
79 Halkurike- Jayadevappa et al., 2019 Prospective observational study Adult patients with cirrhosis 356 48   25.6 IRLS scoring system RLS 9
80 Bhowmik et al., 2003 Comperative study Hemodialysis patients 121 34.5   11.1 Predesigned questionnaire RLS 5
81 R. Gupta et al., 2018 Cross sectional observational study Patients with opioid use disorder 19 30.2   10.4 Predesigned RLS 6
82 Bathla et al., 2016 Cross sectional study Patients undergoing hemodialysis 194 54.5+15 Face-to-face interview, IRLS questionnaire RLS 7
83 A. Gupta et al., 2017 Prospective study Stroke patients 346 54.87+12.03 Pre-structured sleep questionnaire RLS 9
84 Velu et al., 2022 Cross sectional study Patients with End-stage kidney disease 148 44+14.5 ESS, PSQI  RLS, EDS 10
85 R. Gupta et al., 2013 Cross sectional observational study Subjects presenting to psychiatry OPD with complaints of depressive illness 54 35.58+33.22 MINI-Plus Interview, IRLSSG criteria RLS 9
86 Raj & Ramesh, 2021 Cross sectional study Patients diagnosed with Tuberculosis 206 41+16.2 PSQI, ESS  RLS, EDS 6
87 Raj et al., 2019 Cross-sectional study Type 2 diabetes  patients 102 56.88+10.98 ESS  RLS, EDS 7
88 Kaur & Singh, 2017 Cross-sectional study College students 1215 19.5+4.7 ESS  EDS 4
89 A. Singh et al., 2017 Prospective cross sectional study Subjects with age groups ≥ 25 years 1512 42.6+11.2 ESS, face to face interview EDS 5
90 Roopa et al., 2010 Cross sectional study Random subjects aged 20-76 from Chennai Urban Rural 358 43.7+12.7 Standard validated questionnaire EDS 8
91 Krishnaswamy et al., 2016 Prospective study Bus drivers working in Karnataka State Road Transportation Corporation 180 41.4+9.3 ESS  EDS 6
92 Ghante et al., 2021 Cross-sectional study Postnatal women 225 25.16+3.98 ESS, PSQI  EDS 7
93 Dey et al., 2020 Cross-sectional study Doctors from all the clinical department 100 35.32+6.21 PSQI, ESS  EDS 8
94 Venkatnarayan et al., 2022 Cross sectional observational study OSA patients 100 49.5+13.3 PSG EDS 5
95 Shoib et al., 2022 Cross-sectional study OSA patients 182 54.89+12.89 PSG, ESS  EDS 6
96 Samanta et al., 2013 Cross sectional observational study Patients of cirrhosis 100 49.1+11.4 PSQI, ESS  EDS 5
97 P. Sharma et al., 2016 Cross-sectional study Patients with schizophrenia 100 30.63+8.7 PSQI, ESS  EDS 7
98 Sreedharan et al., 2021 Prospective study Patients getting admitted for coronary artery bypass surgery  120 60+11.5 STOP-BANG   EDS 7
99 S. Mahajan et al., 2012 Cross sectional observational study Patients on maintenance hemodialysis for >3 months 47 37.1+13.1 ESS  EDS 5
100 Kadam Y, Patil S, Waghachavare V, Gore A, 2016 Cross sectional study College students from an urban area 900 19.3+1.5 Pre tested self- administered questionnaire EDS 6

Source: Systematic Review of Prevalence of Sleep Problems in India: A Wake- up Call for Promotion of Sleep Health by Karuna Datta, Anna Bhutambare, Hruda Nanda Mallickfd

Note: CKD: Chronic Kidney Disease, OSA: Obstructive sleep apnea, RLS: Restless Legs Syndrome, EDS: Excessive daytime sleepiness PSQI: Pittsburgh Sleep Quality Index, PHC: Primary Health Centre, ESS: Epworth Sleepiness Scale, ISI: Insomnia Severity Index, PSG: Polysomnograpgy, PHQ-9: Patients Health Questionnaire, BDI: Beck Depression Inventory, BSA: Berlin Sleep Apnea, BQ: Berlin Questionnaire, PDSS-2: Parkinson Disease Sleep Score-2, AHI: Apnea Hypopnea Index, SRBD: Sleep Related Breathing Disorder, COPD: Chronic Obstructive Pulmonary Disease, PDSS-III: Parkinson Disease Sleep Score Part-III, IRLSSG: International Restless Legs Syndrome Study Group, IRLS: International Restless Legs Syndrome severity scoring, MINIPlus: Mini International Neuropsychiatric Interview Plus, JBI: Joanna Briggs Institute

2025 Healthcare and Life Sciences Investment Outlook

2025 Healthcare and Life Sciences Investment Outlook

Mankind versus ChatGPT: Our Caveat for 2025

For the first time in AI’s and mankind’s history, the line between what is human and what is AI-driven technology is increasingly blurring, we are witnessing that ChatGPT and other OpenAI models, can influence the rates of false negatives and false positives in various healthcare and investment applications including algorithms that make investment calls based on future predictions. We have been making annual healthcare and life sciences investment predictions since 2013 with 95% accuracy except during the Covid pandemic years. It seems that ChatGPT itself is turning out to be a black swan event for the algorithms which are predicting the future so accurately in the past. As ChatGPT becomes mainstream, we need to understand the “Confusion Matrix” (see chart below) that will ensure with the power of AI and ChatGPT versus the humans in the future as more and more AI-generated content and analytics proliferates the world in 2025 and beyond. 

Confusion Matrix for AI ChatGPT and Human Predictions
Confusion Matrix for AI ChatGPT and Human Predictions

As industries including, Healthcare and Lifesciences is adopting AI very rapidly for delivering healthcare and so do the Banking and Financial Services, investment managers using AI-driven algos for investment calls. We would need to take cognizant of the False Negatives and False Positive that would elevate the risks and mitigate accordingly. We have included AI as one of the factors in our 2025 Outlook, India Healthcare and Lifesciences Investment Heatmap.

2025: Heal the World – From Geo Politics to Socio Politics

In our 2024 forecast last year we included Geopolitics for the first time in our investment heatmap as the signals were emerging as early as mid-2023. While 2024 witnessed global geopolitics upheaval with regime changes through democratic elections and other means with over 60 wars and armed conflicts ongoing around the world, we were seeing signals of slowdown in growth and investments in Q12024 itself. As a result, as we exited 2024, the growth and investment climate slowed down significantly.

The broad global theme for 2025 is “Heal the World” for better outlook for 2026 and beyond.  If we are able to heal the world with robust socio political agenda it would turn out to be the future prosperity of mankind.

2025: India’s Healthcare and Lifesciences Innovation and Business Models

India was also not insulated with the global geopolitics impact. In 2024, there was ~50% decline in capex and investments in the sector.  We expect 2025 to continue to be a weak year for investments in the sector. After our general elections, there were uncertainties in our region and further slowing of investment and capex cycles on the back of global slowdown. Healthcare is a big creator of employment and it should not slow down any further in 2025.

Since Q12024, the signals were towards robust investments in early stage innovations and growth in new age business models which we have been labelling as “cross-domain” investment ideas. In March 2024, we released 2024 – India Healthcare And Life Sciences Investment Manifesto | Kapil Khandelwal KK covering key 40 bets that will be an opportunity to invest in the sector that will witness an upside beyond the market returns for the sector over the next 5 years. This will accelerate the investments that was with USD 857 million in 2024 to reach a unicorn status of over USD 1 billion in 2025. Fortunately, this is the only segment witnessing positive growth in investments in 2024 and continues to attract robust growth and investments. 

Hence, we have made attempts to analyse International ‘Geo Politics’ as a separate factor and bolt-on-top of our algo predictive models to adjust our heat map for 2024 to accurately predict whether the heat is on in our 2025 Investment Heat Map.

The wave of optimism for 2025 in Indian healthcare and life sciences stems from the following:

  • Over half of Indian consumers are increasingly curious to understand their body and well-being by ‘listening to their body’. Innovators and start ups are exploring this opportunity to scale up their ventures.
  • Many of the start-ups of the Pre Covid India Stack in healthcare are either pivoting to including AI tech or will perish as AI goes turbo. We are expecting around 450 such start ups at this stage of AI upgrade.
  • Agentic AI effectively turbocharges the Do It For Me (DIFM) healthcare economy. Early adopters include GenZ and Millennials (approx 50% of Indians) users who will have their own bots or AI agents helping them choose products and execute transactions in adoption of healthcare products and services as the line between what is human and what is technology will be blurring. Competition will tick-up as starts-ups grow.
  • “AI for All is not All” as consumers are getting more consumerised for their health needs. AI cannot solve it all for all of Indian consumers healthcare needs. These include Gen X and Seniors (approx 44% of Indians) are skeptics and late adopters. This innovative products to serve these cohorts is key.
  • New business models/incubation for investments are emerging (see our 40 Future Bets in Healthcare 2024 – India Healthcare And Life Sciences Investment Manifesto | Kapil Khandelwal KK) that are cross-domain and will be a potential USD 50 billion addition to India’s GPD in next 5 years.
  • Healthcare real estate will also explore cross-domain concepts to fit consumer needs.
  • Wellness is now an ‘Avatar’ that is experiential and connects with other lifestyle domains such as beauty, cosmetics, travel, tourism, hospitality, food, technology, wearables tech, work environment and many more. Holistic innovation in experiential longevity is emerging.
  • Alternative therapies are now body rejuvenation biohacks that traditional and alternative medicine and wellness cannot provide or fulfill completely and which health fascism fuels. Indian GenZ and Millennials are leading this change.
  • New age innovative medical integrative DIFM models will be a push for medical and wellness tourism repositioning for India medical tourism.
  • In 2024, the BSE Healthcare Index was one of the standout performers, delivering an impressive 40% year-to-date (YTD) return. This trend continues in 2025.
  • The valuations have come back to realistic levels to peak by 2026-27.
  • Private hospitals are now aggressively embarking on increasing bed capacity after a phase of consolidation in 2024.
  • M&A and buyouts are expected to continue to be buoyant.
  • Healthcare real estate are expected to launch and kick off innovative cross-domain formats.

The 2025 India Healthcare and Life Sciences Investment Heat Map is as under:

2025 India Healthcare and LifeSciences Investment Heat Map
2025 India Healthcare and LifeSciences Investment Heat Map

Healthcare Financing

With mental health needs and healthcare fascism at its peak, newer products and services for financing longevity and healthy lifestyle for the Gen Alpha and Gen Z are emerging. Cross domain models of business are emerging to address the needs to finance consumers needs to such emerging products and services. 

2025 Outlook: Moderate

  • What may go wrong: false claims by online influencers, right pricing, reach and penetration to consumers, improper lifestyle based consumer segmentation, business volatility in some NBFCs, newer regulations on consumer credits by RBI, lower consumer spending and financing, outstanding credit cards debt
  • What’s going right: AI intervention and solutions, lower interest rates,

Medical Education

Medical education content is no longer the marker for better valuation and funding. The market has flipped to buyers’ market. The investors are no longer entering into opportunities at the current valuations and will lead to rerating downwards. Need major reforms in the medical education sector.

2025 Outlook: Low

  • What may go wrong: lower student enrollment, regulatory issues, new emerging careers in industry, accreditation and learning models, international players and competition
  • What’s going right: AI-generated content creation, immersive content, stable valuations

Med Tech Innovation and Life Sciences Discovery and Clinical Development

Trump Administration and the US BioSecure Act will be a positive. India has to enter the big league of biologics with global partnerships as Chinese firms will face headwinds. Cross domain innovation with AI is the key to leapfrog in the global race. Also India needs to reinforce its success in Covid vaccine development to reignite confidence in India. Expect a major IPO.

2025 Outlook: Moderate

  • What may go wrong: over dependence on Chinese players, slower reverse brain drain transition of drug hunters from US, low qualified life sciences professionals pool, lower grant funding, no further sops in the 2025 finance budget
  • What may go right: emerging social innovation models, market appropriate solution development, native AI models

Pharma and Therapeutic Solutions

Volume growth in the domestic markets, US generics price erosion, with the softening of input costs, ongoing decoupling of supply chain with China and currency depreciation to continue in 2025, will improve the margins very marginally.  The companies with strong cash positions will increase capex and also buyouts and M&A activity. Not any major name IPOs expected.

2025 Outlook: Moderate

  • What may go wrong: Slower China decoupling of supply chain, continuing US generics markets prices decline, potential increase in tariffs by the US under Trump regime, increased APIs prices, continuing domestic market volume degrowth, no further sops in the 2025 finance budget
  • What may go right: US BioSecure Act to favour India, increased R&D spend, new products pipeline, newer capex cycles, multi-year high in US active drug shortages

Healthcare Providers

Capacity creation will now be around 2500 beds in tier 2 and 3 cities. Funding cycles improve as internal accurals improve for fresh capex and capacity expansions and inorganic expansions. Expect a few IPOs, buyouts and exits via secondary sale.

2025 Outlook: Hot

  • What may go wrong: margin pressures, supply and demand mismatch in micromarkets, lower medical tourists arrivals, rising valuations, stable margins
  • What may go right: asset-lite models, launching into new medical tourism markets

Healthcare Insurance

Payors are seeing insurance penetration grow since the Covid pandemic. Newer markets in the GenZ and Millennials cohorts and geographically tier-2 and 3 cities are the essential for growth. Bundled products and services for health and wellbeing is the key. AI modelling will assist in accurate underwriting of risks. Agentic AI entry to change the solicitation and selling customised bundled products.

2025 Outlook: Hot

  • What may go wrong: bundled product for consumer needs, product approvals, risk mitigation for new products, consumers need for longevity, agentic AI to connect consumers, payors and providers for seamless services
  • What may go right: Consumer demand, reduced loss ratios, AI fraud detecting agents

Health Retail

Anti-digital trend is catching up with consumers expecting analogic human to human touch for consuming healthcare products and services in cross-domain settings which is now perceived aspirational and desirable. Many digital business models need to tweak their phydigital presence mix. Its back to innovative traditional health retail settings.

2025 Outlook: Hot

  • What may go wrong: failing to provide the human to human touch points, talent for new age health retail settings, anti-digital pivoting, wrong business model assumptions
  • What may go right: exits in failed business models, profitability focus, phydigital presence

Wellness

The past wellness definition is no longer relevant. New age ‘Gen-Z’ed wellness business models and innovation is emerging which brings in the cross-domain experiential products and services. Redefinition of wellness is the key and will show case the future winners. These innovations will fuel India’s new age wellness tourism too.

2024 Outlook: Hot

  • What may go wrong: regulation, talent and skills in cross domain products and services, micro market segmentation, faster beta testing, new mass market business models, spurious social media channels, fake outcome/claims
  • What may go right: Gen Z micro segmentation, wearables, biosensors, newer phydigital formats

Alternative Therapies

Redefined by cross-domain influences, emerging tech, wearables, biosensors, cutting-edge innovation in life sciences with other domains fueled by GenZ experimentation with new biohacking and health fascism expressions. It is going to be the next destination of value care in healthcare emerging from real need and experience of consumers for Do It For Me (DIFM) healthcare.

2025 Outlook: Hot

  • What’s going wrong: regulations, consumer education and confidence, clinical research, new product development, new mass market business models, repeat sales, spurious social media channels, fake outcome/claims, wrong Gen Z role models, developing phydigital formats
  • What may go right: discretionary consumer spending, newer cross-vertical innovative business models, mainstream complementary treatment, wearables, biosensors

Moving Forward

2025 will be a pivoting year for mankind, healthcare and investing as AI for All is not All.

Happy investing and stay strong!

Media Coverage

M&A, Buyouts in Healthcare to Remain Coverage in VC Circle

M&A, Buyouts in Healthcare to Remain Coverage in VC Circle

2025 India Healthcare and LifeSciences Investment Outlook Coverage in Express Pharma Feb 2025

2025 India Healthcare and LifeSciences Investment Outlook Coverage in Express Pharma Feb 2025

Rebooting Age: Long-Living India

Rebooting Age : Long-living India

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QuoteUnQuote with KK and Dr. Deepak Kumar Saini, Convener, Longevity India and Professor, Dept. of Developmental Biology & Genetics Indian Institute of Science (IISC), discuss Bet #3 on anti-ageing tech and products that is going to be a major trend in the next 5 years. Why is it so? 

As 50s is the new 30s now. Present Genx and seniors would like to reverse age or age slowly. By 2047, over 300 million Indian would be Senior Citizens and our dependency ratio will be around 40%. Indian would like to extend their lifespan 20% to 50%. But the trick here is to ensure that the end of life after prolonged life is a quick process rather than a prolonged decline. 

Bharatvarsh – Pilgrim Nation: The Land of Spiritual Wellness Travel

Bharatvarsh: The Destinations for Spiritual Wellness Journeys

Podcast

QuoteUnquote with KK and Dr Devdutt Patnaik, India’s top mythologist and author discusses on our bet #our Bet #22 on mythological/pilgrimage wellness/health that is going to be a major trend in the next 5 years from our 2024 India healthcare and lifesciences investment manifesto. Devdutt, clears the issues on Bharatvarsh, sprituality, spiritualism, the Great Indian Pilgrimage, destinations across Hindu, Jain, Buddhist followers, ancient practices and modern beliefs. He also discusses various emerging counter trends around non-traditional spirituality, conspirituality amongst the extreme rightists and wokes, fake narrative emerging out of AI and ChatGPT and how belief systems are being altered around practice of spirituality and religion.

Excerpts

What is Spirituality?
How is Religion Different from Spirituality?
How is Bharatvarsh defined by Politicians, Pilgrims and Vedas?
Are there Counter Trends to Spiritualism?
How do we address the Saviour Mindset?

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2024 – India Healthcare and Life Sciences Investment Manifesto

2024 - India Healthcare and Life Sciences Investment Manifesto

TV Interview in ET NOW

Coverage in the Press

Express Pharma Q&A : These 40 bests would deliver $30 – $50 bn additional growth to healthcare sector by 2029

Express Healthcare Q&A

Business Standard : Anti-Ageing Tech Likely to Shape Heathcare Demand in Coming Years

Business Standard - Anti Ageing Tech Likely to Shape Heathcare Demand in Coming Years

2024 India Healthcare and Lifesciences Investment Heatmap

2024 India Healthcare and Lifesciences Investment Heatmap

In 2024, the world will be as uncertain, if not more, as it was and anticipating what will happen next is an ever more challenging task for our Algorithms and our teams. Since 2013, our algorithms have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Since the Covid Pandemic in 2020 we lowered levels of prediction accuracy like we started back in 2013. The fake narratives and echo chambers that were peddled during the pandemic years of 2020-22, that vitiated our predictions during the pandemic years continues in for some other factors. 2023 was even more unpredictable in many ways. Our algos do not penetrate the terrorists, government intelligence and security networks and hence unable to consider events that playouts in the Middle East and impacting geopolitics, investments in Indian Healthcare and Life Sciences to some part of the investment flows from offshore. Hence, we have made attempts to analyse International ‘Geo Politics’ as a separate factor and bolt-on-top of our algo predictive models to adjust our heat map for 2024 to accurately predict whether the heat is on in our 2024 Heat Map.

2024: A Year of Geopolitics than Geo Economics

The biggest political event in India in 2024 will be the Lok Sabha General Elections. Hence H1 2024 will not see any major policy or budgetary directions to the sector till the new Government takes over in New Delhi by June 2024 and then presents its budget. For the first time, in the post pandemic era, almost all global funds, analysts and bankers have a unanimous consensus on India’s positive outlook for 2024, some even covering India as a separate chapter in their reports which was dedicated to China in their Asia Outlook till 2022. However, healthcare and life sciences sub sectors in India have its divergence to the overall India outlook for 2024. We have endeavored to bring out the deeper analysis and specifics out of the broad ‘India Positive’ Outlook for 2024 for the Healthcare and Life Sciences Sector in India.

The wave of optimism for 2024 in Indian healthcare and life sciences stems from the following:

  • The pace of digitization is now veering toward mainstream adoption of Generative Artificial Intelligence (AI) tools and solutions across that are being piloted.
  • New business models/incubation for investments are emerging (see out Future Bets in Healthcare) that will be cross-domain
  • The bills and laws introduced in the Parliament in the Session New Healthcare Bills 2023 Archives | Kapil Khandelwal KK are yet to shape bounce in investments.
  • Muted returns in the private markets will continue in 2024 as the winter of private investments continues in 2024. Let us understand that the best investments tend to occur during times when investment outlooks appear riskier, so the lower prices in many kinds of equity investments might well yield attractive returns over time.
  • Companies listed on the bourses have always underperformed the broader index in the last 2 general elections of 2014 and 2019 by -4.5 to -6.5%. We are expecting the elections results to be neutral this time on the Indian bourses. A few big names to IPO in 2024.
  • With one-third of India’s population now constituting Gen Alpha and Gen Z, the health and wellness aspirations of this cohort is the growing aspirational class that wants to live life post Covid-19 differently and different products and services will serve as the next growth opportunity.
  • The valuations have come back to realistic levels to the pre-covid levels for primary and secondary investments.
  • Debt and equity requirements have stabilised as the cash-crunch situation during the pandemic have ‘normalised’ and so are the return expectations. Both are negatively correlated with yields globally. In other words, investments in equity and its returns will tend to outperform the market, as yields decline.
  • As new Generative AI capabilities emerge, the investments in human capital for newer skills are emerging. Also, newer models of ‘sweat’ equity/debt are emerging.
  • Investments in newer health and wellness solutions to weather climate change are getting exciting. (see out Future Bets in Healthcare).
  • M&A and buyouts are expected to continue, but lower from the peak of 2022.
  • How India plays its geopolitics will also determine the quality and quantum of foreign investments in India in the various sub sectors.

The 2024 India Healthcare and Life Sciences Investment Heat Map is as under:

Healthcare Financing

Newer products for financing healthy lifestyle for the Gen Alpha and Gen Z are emerging. Financing ‘idleness’ and healthy entertainment lifestyle through innovative business models are the key. There is a consumer shift for spending on healthy lifestyle which is a personal investment in longevity of healthy life.

  • 2024 Outlook: Moderate
  • What’s going wrong: slower market/product innovation, right bite for the consumers, reach and penetration to New Gen consumers, financing costs
  • What’s going right: India stack digitisation, uberisation, AI solutions

Medical Education

Valuations are correcting and consolidation activity is accelerating. New regulatory regime will come into force and will require investments in managing the delivery and quality of content. New skills for the new AI tools and newer consumer’s requirements needs is accelerating but not in the curriculum.

  • Outlook: Moderate
  • What’s going wrong: Alignment to new consumers and care, increasing debt burden, new age skills certification, CME with AI-tools
  • What’s going right: Skill-mix churn, upgradation of skills, AI for frontline workers

Med Tech Innovation and Life Sciences Discovery and Clinical Development

Capacity creation and new product development continues as India is now into the China+1 club. Expect a few IPOs this year in this sector. Government grant funding will temper down. Geo polities is a key risk to create supply chain disruptions.

  • 2024 Outlook: Hot
  • What’s going wrong: IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration, PLI policy for sub sector, geo politics, supply chain disruptions
  • What’s going right: Human capital, emerging social innovation models, right products selection, market appropriate solution development, peptide based products, chronic diseases product innovation for co morbidities

Pharma and Therapeutic Solutions

Geo politics may affect supply chain and missed topline and profitability estimates. Cost competitiveness like Chinese players to compete globally is the key for growth. Expect a few IPOs, buyouts and exits via secondary sale.

  • 2024 Outlook: Moderate
  • What’s going wrong: price controls, wrong product portfolio, capacity scale up, global or China-level cost competitiveness, exit of PLI incentives, shortage of skilled workforce
  • What’s going right: distribution infrastructure, digital business models, government incentive programs

Healthcare Providers

High levels of leverage is still a concern. Private equity investments slowing down due to valuation expectations. Expect a few IPOs, buyouts and exits via secondary sale. Capacity creation is slowed down due to fund crunch.

  • 2024 Outlook: Moderate
  • What’s going wrong: margin pressures, price controls, execution of programs on the ground, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch, not exploring newer formats
  • What’s going right: asset-lite models, medical tourism

Healthcare Insurance

Loss ratios and profitability is slowing improving as pricing and products are rationalized. Expect two IPOs of two major players. New products innovation for newer consumer’s requirements is lagging.

  • 2024 Outlook: Hot
  • What’s going wrong: product fit to consumer needs, product approvals, IPOs pricing and valuation
  • What’s going right: Consumer demand, reduced loss ratios

Health Retail

The Pharmacy Bill 2023 brings its own set of challenges. AI pilots once mainstream will reduce costs and margin pressure albeit very slowly. The valuation is still a challenge for raising fund and buy-outs, secondary exits. Expect an IPO.

  • 2024 Outlook: Hot
  • What’s going wrong: regulation, operating margins, spurious social media channels affecting consumer confidence, health UPI, time to scale
  • What’s going right: consolidation, newer cross-vertical innovative business models, profitability focus, AI adoption and models

Wellness

2021 was the highest growth year in the last 10 years on the back of discretionary consumer spending on wellness. Digital business model innovation is still lagging. Medical wellness tourism will be recover in Q3 of 2022. M&A activity and consolidation to continue in 2022 but at a slower pace. Corporate Wellness spends to continue to fuel growth in 2022

  • 2024 Outlook: Very Hot
  • What’s going wrong: regulation, maturity to scale, new mass market business models, repeat sales, spurious social media channels, fake outcome/claims
  • What’s going right: newer cross-vertical innovative business models, corporate wellness spending

Alternative Therapies

New Gen consumers are seeking unique experiences and combing with mental health and rejuvenation as their discretionary spends are increasing.      

  • 2024 Outlook: Very Hot
  • What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development, inflated valuation, new mass market business models, repeat sales, spurious social media channels, fake outcome/claims
  • What’s going right: discretionary consumer spending, newer cross-vertical innovative business models, mainstream complementary treatment

Moving Forward

As one iconic smart investor said that one should be investing in healthcare and life sciences because you believe smart investing will yield results that are beneficial for society, not just to enrich oneself.

Happy investing and stay strong!

Also Published in Express Pharma February 2024

2024: Healthcare and Life Sciences Investment Outlook

2023 India Healthcare and Lifesciences Investment Outlook

2023 India Healthcare and Lifesciences Investment Outlook

Since 2013 our algos have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Since the Covid Pandemic in 2020 we lowered levels of prediction accuracy like we started back in 2013. Covid-19 pandemic killed over 23 million people globally. 2022 has brought new headwinds, some we haven’t seen in over 40 years. Healthcare spending will fall in 2023 in real terms, given high inflation and slow economic growth, forcing difficult decisions on how to provide care. Digitalisation of the healthcare system will continue, but the use of health data will come under stricter regulation. A New world order under the current geo politics fragmentation and multilateral world is bringing India to the forefront. It’s vaccine diplomacy, effective and cost-effective therapeutic solutions is a game changer for India.   

2023: A Year of Newer Normal

Since the Great Chinese famine of 1959, for the first-time life expectancy as per UN, Covid-19 had been cut by 1.7 years off global life expectancy, reducing it to 71.1 years. While a recovery probably began in 2022, the UN calculates that 2023 will be the year when life expectancy first exceeds 2019 levels. The investment thesis with most of the investment managers in the current scenario is more of a long view on healthcare infra which are less tied to economic cycles and an imminent slow down globally. Some of the investment risks the healthcare and lifesciences sector faces include rising real interest rates, increasing price inflation for healthcare products and services in the face of weakening in consumer spending, reshoring the supply chains and the wars, both trade and terriotorial. Digital businesses are equally going to be impacted. ESG and impact funding is waiting for deployment.

2023 India Healthcare and Lifesciences Investment Outlook
2023 India Healthcare and Lifesciences Investment Outlook

Let’s relook at the board trends for 2023 in terms investment activity and trends.

Healthcare Financing

2021 was an all time-high for healthcare financing sector due to emergency and non-discretionary spend on healthcare. Health Tourism related funding is only going to take off in Q3 after the current wave tides down. Consolidation activity to slow down.

2023 Outlook: Moderate

  • What’s going wrong: right bite for the consumers, reach and penetration, higher debt financing costs, slower non-discretionary and elective healthcare spend, delaying of healthcare spend and health tourism, new wave restrictions, shortage of digital workforce
  • What’s going right: India stack digitisation, agetech, consumer borrowing to spend on electives

Medical Education

Skilled manpower shortages is the key driver for growth. All the students who have returned back from Ukraine need to be accommodate in our current system Regulatory reforms are urgently required to push digitization and newer business models for upskilling existing workforce. Churn in ownership of assets due to consolidation activity will continues at a faster pace.

2023 Outlook: Moderate

  • What’s going wrong: regulation, corruption, no vision, skill shortages, alignment to new age care, increasing debt burden
  • What’s going right: skill demand, digitisation, manpower-led business models creating their own content or tying up with larger established players, cross-border students coming to India, export of clinical manpower to the West     

Med Tech Innovation and Life Sciences Discovery and Clinical Development

India has proven to be the vaccine supplier to the world in 2022 with over forty percent of the world’s pre-qualified vaccine products are made in India. Capacity creation and new product development need to be accelerated particularly in infectious diseases and some niche segments. Reshoring and government policies for that need to be accelerated. Global investment and partnerships is on the rise in 2023. Patent expiry of some of the blockbusters in the US are a huge opportunity.

2023 Outlook: Moderate

  • What’s going wrong: Innovation pipeline, IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration, global collaboration and partnerships
  • What’s going right: Human capital, cost advantage, reshoring the supply chain, Make in India

Pharma and Therapeutic Solutions

Several players are going to go for the IPOs in 2023. Reshoring the supply chain is moving slowly. The Government production linked incentive is not moving as intended in the medtech, intermediates, APIs. The capital expenditure in creating world-class green infra is still to take off.

2023 Outlook: Hot

  • What’s going wrong: price controls, policy log jam, innovation and scale up, cost competitiveness, exit of PLI incentives, scale of capex, Margins pressure, IPO valuation
  • What’s going right: cost advantage, distribution infrastructure, Government incentive programs, blockbuster going off patent in the US, ESG funding entry

Healthcare Providers

2022 was a negative year for almost all the listed stocks. With higher interest rates, funding costs for have increased. Inputs such as steel, cement, etc, have also shot up increasing the capex per bed. Newer sources of funding green healthcare infra as a long-term bet which are less tied to economic cycles is emerging. Digitalisation will slow down even further as consumers go back to the old ways. Costs and profitability pressure will increase to maintain the investor interest. PE valuations will continue to get right adjusted to market valuation.  

2023 Outlook: Moderate

  • What’s going wrong: margin pressures, price controls, execution of programs on the ground, PPP in healthcare, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch
  • What’s going right: Asset-lite models, demographics

Healthcare Insurance

The IPOs in 2021 in the sector have created uncertainty in valuation and investor sentiment. The sector will continue to grow as it did in 2022. New products and customer segmentation is going to be the growth drivers

2023 Outlook: Hot

  • What’s going wrong: product fit to consumer needs, product approvals, loss ratios, operating cash runway, human capital reduction, consumer offtake and demand, IPOs pricing and valuation
  • What’s going right: Consumer demand, digitisation, new products

Health Retail

Spends on healthcare are slowing down and so is the discretionary spend. Falling service levels and consumer trusts is at an all-time high. Costs and margin pressures is going to be more acute. Only one major IPO expected in 2023. Many of the late stage start-up are going to scale down or not raise the capital at the expected valuations.

2023 Outlook: Moderate

  • What’s going wrong: regulation, consolidation, slower consumer spending, funding drying up, operating cash runway,
  • What’s going right: Consolidation, newer cross-vertical innovative business models, profitability focus and valuation being right adjusted

Wellness

Growth which tapered down in 2022 is still going to be sluggish in 2023 as consumers cut back their spends. Digital business model innovation is still lagging behind. Medical wellness tourism will be recover in Q3 of 2023. Corporate Wellness spends which also scale down even further. PE funding is going to slow down even further as valuations squeeze even downwards with margin pressure. Expect one major IPO here.

2023 Outlook: Hot

  • What’s going wrong: regulation, maturity to scale, down round valuations, slowing of wellness spends, manpower and cost pressures
  • What’s going right: newer cross-vertical innovative business models,

Alternative Therapies

Growth and new customer acquisition is the new mantra in 2023 as consumer spending decelerates further. New products and therapies that have accessed funding in 2021are going to find it difficult to raise at the expected valuation. Large MNCs are also entering in this space to fight for the consumer’s mindshare. Funding crunch is going affect growth. Expect an IPO. Some of the players may scale down or shut down due to funding. Consolidation activity will increase.

2023 Outlook: Hot

  • What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development, growth, funding crunch,
  • What’s going right: discretionary consumer spending, newer cross-vertical innovative business models, mainstream complementary treatment.

Let’s wish that we focus on building trust in healthcare for the consumers in 2023 and there is peace across for the world to come out of recessionary trend that would boost the investor confidence across.

Happy investing and stay safe!

Also Listen:

 

2022: Healthcare and Life Sciences Investment Outlook

2022: Healthcare and Life Sciences Investment Outlook

Since 2013 our algos have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Since the Covid Pandemic in 2020 we lowered levels of prediction accuracy like we started back in 2013. While we worked on the Heat Map for 2022, we realized that every new wave of Covid is like a black swan event and raises the uncertainty and reduces the accuracy of the predictions with a reset. For 2021, we released two sets of heat maps, one for the healthcare and life sciences sub sectors and another for the States. Since the Central Government took the mantle of immunization, the need for updating state-wise heat map for 2022 is not relevant and not much data is being updated except for the electioneering noise and promises by political parties and immunization achieved.

2022: A Year of Consolidation and Tempering Expectations

2021 was the record year since 2013 when we started tracking the healthcare and lifesciences investments. The investments across the board was the highest, with the maximum number of IPOs and M&A activity, with over USD 2.2 Bn in funding across all the sectors in 2021. Some of the investment activity we predicted for 2022 preponed to 2021 due to positive investor and market sentiments and uncertainty of the future waves of Covid. Therefore, 2022 is a year of consolidation and tempering the tempo of investments.  

2022 Outlook
2022 India Healthcare and Life Sciences Investment Heat Map

 Let’s relook at the board trends for 2022 in terms investment activity and trends.

Healthcare Financing

2021 was an all time-high for healthcare financing sector. However, recent clamp down of Chinese funded consumer financing fintechs is going to temper down the healthcare financing sector. Health Tourism related funding is only going to take off in Q3. Consolidation activity to slow down.

  • 2022 Outlook: Hot
  • What’s going wrong: regulation clamp down, right bite for the consumers, reach and penetration, higher debt financing costs, slower non-discretionary and elective healthcare spend, delaying of healthcare spend and health tourism, new wave restrictions, shortage of digital workforce
  • What’s going right: India stack digitisation, consumer borrowing to spend on non-electives, immediate gratification, reduced household savings supplemented by borrowings

Medical Education

Key shortages of healthcare frontline workers was very apparent during 2021 Covid Crisis. The need for regulatory regime to upskills is still being reworked. Healthcare could be the key job creator. Regulatory reforms are urgently required to push digitization and newer business models for upskilling existing workforce. Churn in ownership of assets due to consolidation activity will continue albeit at a slower pace.

  • 2022 Outlook: Hot
  • What’s going wrong: regulation, corruption, no vision, skill shortages, alignment to new age care, increasing debt burden, new age skills certification, funding dry up
  • What’s going right: skill demand, digitisation   

Med Tech Innovation and Life Sciences Discovery and Clinical Development

India has proven to be the vaccine supplier to the world in 2022. Capacity creation and new product development will continue. Dependence on Chinese supply chain will reduce further as alternatives are developed indigenously. Expect a few IPOs this year in this sector. Government grant funding will temper down.

  • 2022 Outlook: Hot
  • What’s going wrong: innovation pipeline, IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration, Government grants and funding slow down
  • What’s going right: Human capital, cost advantage, emerging social innovation models, lower dependence on Chinese supply chain

Pharma and Therapeutic Solutions

M&A and consolidation activity was at a record high since 2016. Shortage of digital workers will slow down the digital transformation activity. As China substitution and supply chain threats mitigate, the Government will temper down their PLI support as well

  • 2022 Outlook: Hot
  • What’s going wrong: price controls, policy log jam, wrong product portfolio, innovation and scale up, global or China-level cost competitiveness, exit of PLI incentives, shortage of skilled digital workforce
  • What’s going right: cost advantage, distribution infrastructure, digital business models, Government incentive programs

Healthcare Providers

Funding costs will zoom up and will make access to long-term capital dearer. Huge churn in asset ownership and consolidation activity will continue. Digital transformation activity will slow down due to skill shortages

  • 2022 Outlook: Moderate
  • What’s going wrong: margin pressures, price controls, GST slabs rationalization on inputs, execution of programs on the ground, PPP in healthcare, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch
  • What’s going right: Digital business models augmentation, asset-lite models

Healthcare Insurance

The IPOs in 2021 in the sector have created uncertainty in valuation and investor sentiment. The sector will continue to grow as it did in 2021. Digital push and intermediation will be the key to growth.

  • 2022 Outlook: Hot
  • What’s going wrong: product fit to consumer needs, product approvals, loss ratios, operating cash runway, human capital reduction, consumer offtake and demand, IPOs pricing and valuation
  • What’s going right: Consumer demand, digitisation 

Health Retail

The major consolidation of the health retail after hectic M&A activity of 2021 will slow down the decibel levels of consumer discounts and offers to focus on generating healthy bottom lines. Only one major IPO expected in 2022.

  • 2022 Outlook: Moderate
  • What’s going wrong: regulation, consolidation, slower consumer spending, excess funding for GMV and operating cash runway
  • What’s going right: Consolidation, newer cross-vertical innovative business models, profitability focus

Wellness

2021 was the highest growth year in the last 10 years on the back of discretionary consumer spending on wellness. Digital business model innovation is still lagging behind. Medical wellness tourism will be recover in Q3 of 2022. M&A activity and consolidation to continue in 2022 but at a slower pace. Corporate Wellness spends to continue to fuel growth in 2022

  • 2022 Outlook: Very hot
  • What’s going wrong: regulation, maturity to scale, new mass market business models
  • What’s going right: newer cross-vertical innovative business models, corporate wellness spending

Alternative Therapies

Newer products and therapies that have accessed funding in 2021 will continue to fuel growth and investments. Adoption of alternative therapies into mainstream allopathic as complementary treatment is going to accelerate. Newer product development and business models is the key to sustained growth and success in 2022

  • 2022 Outlook: Hot
  • What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development, inflated valuation,  over capitalization and cash burn to gain market share
  • What’s going right: discretionary consumer spending, newer cross-vertical innovative business models, mainstream complementary treatment.

Let’s wish that there are no further variants and waves in 2022 for any black swarm events for affecting investor sentiments.

Happy investing and stay safe!

Kapil Khandelwal is Managing Partner of Toro Finserve LLP, India’s First Healthcare Infrastructure Fund and Director EquNev Capital Pvt Ltd.

Healthcare and Life Sciences in 2021: Part 1- Sectoral Investments Heat Map

2021 Healthcare and Lifesciences Investment Heatmap

Since 2013 our algos have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Covid Pandemic has completely disrupted and reset the investment cycle in India and we missed out all our prediction accuracy for 2020. We were at cross roads for releasing our Heat Map for 2021. The first was to actually abandon the whole exercise of predicting. The second was to actually relook at India and the world afresh and rebuild out algos and work with lower levels of prediction accuracy like we started back in 2013. We chose the later. While we worked on the Heat Map for 2021, we realized that there were additional variables that would impact investments in 2021 which we have added. These are Human Capital and New Normal Disruptions which would have an impact on how investments and investment activity in healthcare and life sciences in India will pan out in 2021. During 2020, while we were tracking the progress or containment of Covid to an endemic stage in India, we also realized that the execution of the Covid-related measures is in the hands of the States of India given that health is a State subject in our Federal governance structure and different States have demonstrated varying levels of outcomes in healthcare. My blog Sustainability of Digital Health | Kapil Khandelwal (KK) provides this insights. We have taken these into consideration to create for the first time State-wise investment Heat Map under Part 2, Hottest States to Invest for Healthcare and Life Sciences. These have been aggregated into our overall Heat Map here. Please await the release of our Part 2 shortly.

As part of our revised Heat Map for 2020 released in mid-2020, we had predicted a V-shaped recovery for healthcare and lifesciences. March 2020 was the all-time low for the markets and BSE Healthcare Index. By 31 December 2020, the index was at all-time high. With the rapid bounce back of the equity markets, the pricing and returns for healthcare and lifesciences is now not going to be sustainable in 2021, given low cost of debt in India, other supply side challenges, proactive regulations such as Telemedicine Act, National Digital Health Mission (NDHM), PLI Incentives, two leading Covid vaccine candidates.

Vaccine Race and Human Capital to Determine Investment Bounce Back

The investment for the industry for bounce back into the new normal is anywhere estimated to be around INR 120,000 crores a good chunk of this is going to be spent on the vaccination program in India. Our heatmap provides the snapshot of how the investment cycle is gearing up with increased pipeline of deals and investment flows. Markets have already recovered and factored this in their pricing.

2021 India Healthcare and Life Sciences Investment Heat Map
2021 India Healthcare and Life Sciences Investment Heat Map

Based on the Heat Map 2021, we have updated our revised Heat Map of 2020 published in June 2020 with the addition of Human Capital and New Normal Disruptions. Let’s relook at the board trends for 2021 in terms investment activity and trends.

Healthcare Financing

Pay cuts, job losses, low interest rates, reduced household saving and speed for digitization accelerates the ‘India Stack’ to reach to the consumer faster with innovative consumer financing products. Innovation into financing products and services for consumer financing of healthcare will see a few more players emerge. Many existing players are reworking their value proposition and plan to provide innovative products and services thus increasing coverage in 2021. However, as new demand accelerates, risk underwriting is equally important to avoid delinquency.

  • 2021 Outlook: Very Hot
  • What’s going wrong: regulation, maturity to scale, right bite for the consumers, reach and penetration, debt financing costs, slower non-discretionary and elective healthcare spend, delaying of healthcare spend
  • What’s going right: India stack digitisation, consumer borrowing to spend on non-electives, immediate gratification, reduced household savings supplemented by borrowings

Medical Education

Key shortages of healthcare frontline workers was very apparent during the Covid Crisis and now for the vaccination program. The need for regulatory regime to upskills is still being reworked. Healthcare could be the key job creator. Regulatory reforms are urgently required to push digitization and newer business models for upskilling existing workforce. Many of the debt servicing issues of the sector continue to persist with a few more NCLT/bankruptcy cases. A lot more exits expected and churn in ownership of assets due to consolidation activity.

  • 2021 Outlook: Moderate
  • What’s going wrong: regulation, corruption, no vision, skill shortages, alignment to new age care, increasing debt burden, new age skills certification, funding dry up
  • What’s going right: skill demand, NCLT closures, digitisation   

Med Tech Innovation and Life Sciences Discovery and Clinical Development

Focus in 2020 for clinical development had completely pivoted towards Covid vaccines and solutions and of global scale. India-Shinning moment with the two vaccines being awarded the emergency approvals has heightened investor interest in India. Investments will be selective in opportunities for Covid related therapeutic solutions. Social innovation would be the way forward. On the human capital, renewed interest of scientists to return back to India like in 2006-07 outsourcing boom.

  • 2021 Outlook: Hot
  • What’s going wrong: innovation pipeline, IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration
  • What’s going right: Human capital, cost advantage, emerging social innovation models,

Pharma and Therapeutic Solutions

M&A and consolidation activity will spiked up. Digitisation will be a key driver in 2021 and beyond. Some social impact models to counter the bottom of pyramid need gaps are emerging. Will not get mainstream in 2021 as China substitution and supply chain issues need to be resolved urgently inspite of positive policy push.

  • 2021 Outlook: Very Hot
  • What’s going wrong: price controls, policy log jam, wrong product portfolio, innovation and scale up, global or China-level cost competitiveness
  • What’s going right: cost advantage, distribution infrastructure, digital business models, Government incentive programs

Healthcare Providers

Funding and liquidity crisis continue after the lock down. Newer delivery models and hospitals of the future with asset-lite strategy emerge as costs build up and prices remain under pressure. Huge churn in asset ownership and consolidation activity. There will be no major action on PPP front. The telemedicine guidelines accelerate digital business models.

  • 2021 Outlook: Hot
  • What’s going wrong: margin pressures, price controls, GST slabs rationalization on inputs, execution of programs on the ground, PPP in healthcare, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch
  • What’s going right: Digital business models augmentation, asset-lite models

Healthcare Insurance

Complete liquidity crisis due to moratorium of renewals till October 2020. Innovative models for healthcare payors emerge in India for the middle bulge of India Stack for the middle 500 million that are paying out of pocket. As loss ratios will further mount, insurance rate will go northwards. Innovative products and pricing still a distant reality with the regulator in India. Many of the digital healthcare insurance players have to scale back and reduce their human capital and now need to rebuild in 2021. Don’t expect any IPOs.

  • 2021 Outlook: Moderate
  • What’s going wrong: margin pressures, product fit to consumer needs, product approvals, loss ratios, slow pace of innovation, operating cash runway, human capital reduction, consumer offtake and demand
  • What’s going right: Consumer demand, digitisation 

Health Retail

Muted consumer demand and discretionary spending due to reduce disposable income will result in slower growth and GMV pick up. Valuations will be a key issue. Consolidation and acquisitions expected for some to survive and grow. VC and PE interest is still muted and reviving their commitments to those ventures that survived the pandemic situation. Consolidation activity will increase. No serious IPO expected in 2021.

  • 2021 Outlook: Moderate
  • What’s going wrong: regulation, maturity to scale, slower consumer spending, operating cash runway
  • What’s going right: Consolidation, newer cross-vertical innovative business models

Wellness

Discretionary consumer spending on wellness to pick up due to fear of Covid. Mass market moderately priced wellness products and business model innovation is still lagging behind. Post lockdown the growth has not be pre-lockdown due to consumer intertia. However, very innovative business models have emerged for the new normal. Investment activity is yet to pick up in 2021 as most of these ventures are in infancy.

  • 2021 Outlook: Moderate
  • What’s going wrong: regulation, maturity to scale, new mass market business models
  • What’s going right: newer cross-vertical innovative business models, Fit India

Alternative Therapies

The Babas promoting alternative therapies have been coming up with Covid related products and its controversies. MNCs and local businesses have entered in this segment affecting their market share and position. Consumers adoption to accelerate faster as these products become the only choice. In this sub-sector, we are witnessing some very interesting ideas for disruptions in the New Normal these are very much at the seed or angel investing stage.

  • 2021 Outlook: Hot
  • What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development
  • What’s going right: discretionary consumer spending, newer cross-vertical innovative business models

Stay Safe and Happy Investing in the rest of 2021!