The government recently approved extending the free health insurance plan to all citizens aged 70 and over. Photo: Bloomberg
Written by Alex Gabriel Simon
Indian hospital stocks are expected to benefit from the expected growth in healthcare costs, according to one of the country’s leading funds.
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The country will see an acceleration in the number of people reaching retirement age in the next two decades, said Satish Ramanathan, chief investment officer at JM Financial Asset Management Ltd., in an interview. “People are going to spend on health care at an unprecedented rate.”
Prime Minister Narendra Modi’s government has recently approved the extension of free health insurance scheme to all citizens aged 70 years and above. The plan could prompt other state governments to introduce similar measures, giving the sector a boost, according to Ramanathan, who oversees more than $1 billion.
Some of the major players in the industry – Max Healthcare Institute Ltd. and Apollo Hospitals Enterprise Ltd. they got 43 percent and 26 percent respectively, by 2024. The momentum will continue as the increase in insurance provides hospitals with another impetus to expand in a country with just 1.3 beds for 1,000 people.
“Right now India has no safety net,” said Ramanathan. However, the government is increasingly recognizing the situation and taking steps to correct it, he added.
The JM Flexicap Fund has returned more than 40 percent this year, beating 96 percent of peers over that period, according to data compiled by Bloomberg. It has been the best player in its category for a period of three years, the data shows.
Shares of ICICI Bank Ltd. and REC Ltd. – among the top-10 Holdings – will receive 28 percent and 34 percent, respectively, by 2024. In comparison, the NSE Nifty 50 Index gained around 19 percent.
The fund held shares in Global Health Ltd., which operates Medanta hospitals, according to its latest filing. The asset manager’s middle fund held Fortis Healthcare Ltd. from Aug. 31.
First published: October 01 2024 | 10:55 AM IST