Healthcare Emerges as India’s Second-Largest Sector for Private Credit Deployment in H1 2026: EY

India’s healthcare sector emerged as the second-largest destination for private credit deployment in the first half of 2026, highlighting the growing appeal of healthcare businesses among investors looking for resilient companies, relatively stable cash flows and opportunities for long-term growth.

According to an EY report, healthcare accounted for 13% of the total private credit deal value in India during H1 2026, placing it second only to real estate in terms of capital deployment.

The increased flow of private credit into healthcare reflects a broader shift in investor interest as healthcare businesses expand, consolidate and seek alternative sources of capital for growth and refinancing.

Healthcare Attracts Growing Investor Attention

Private credit has increasingly become an important source of financing for companies that may require flexible capital beyond traditional bank lending or public-market funding.

In the healthcare sector, this financing is being used for purposes ranging from refinancing to expansion and broader group funding requirements.

EY said the sector’s position as a leading destination for private credit demonstrates its growing attractiveness among investors.

Healthcare companies often operate in areas supported by long-term demand. Rising healthcare expenditure, increasing awareness of medical services and the growing need for quality care are contributing to the sector’s investment case.

“Healthcare emerging as a top destination for private credit underscores its growing attractiveness to investors seeking resilient businesses with stable cash flows and scalable growth,” EY said.

The sector’s ability to attract capital even during periods of broader economic uncertainty could further strengthen its role in India’s private credit market.

Major Healthcare Financing Deals in H1 2026

Several significant transactions contributed to healthcare’s private credit activity during the first half of the year.

Among the notable deals highlighted in the EY report was a $124 million private credit financing raised by Manipal Group.

Another significant transaction involved ASG Hospital Group, which secured $48 million for group funding requirements.

These transactions point to the increasing use of private credit by large healthcare organisations looking to raise capital for business requirements without necessarily relying on conventional financing routes.

The funding activity also reflects the evolving nature of India’s healthcare industry.

Hospital networks and specialised healthcare providers require substantial capital to expand infrastructure, invest in equipment, enter new markets and support operational growth.

Private credit is increasingly emerging as one of the financing options available to such businesses.

Why Healthcare Is Attractive to Private Credit Investors

The healthcare sector offers several characteristics that can make it attractive to private credit investors.

One of the most important is the relatively essential nature of healthcare services.

Unlike some sectors that may experience sharp changes in consumer demand during economic slowdowns, healthcare demand is generally supported by long-term structural needs.

India’s growing population, rising incomes and increasing awareness of preventive and specialised care are contributing to the expansion of the broader healthcare economy.

For investors, this can translate into businesses with recurring demand and potentially more predictable revenue streams.

The EY report highlighted stable cash flows, resilience and scalable growth as important factors driving investor interest.

However, the investment appeal is not limited to hospitals alone.

India’s healthcare ecosystem includes specialised hospital chains, diagnostics companies, pharmaceutical businesses, medical technology firms, healthcare services providers and other related segments.

As these businesses grow, their need for capital can also increase.

Refinancing and Expansion Drive Private Credit Activity

The strong deployment into healthcare during H1 2026 was supported by significant refinancing and expansion-related financing activity.

Private credit can provide companies with greater flexibility in structuring capital according to their business needs.

For healthcare businesses, that can be particularly useful during periods of expansion.

Building hospitals and specialised medical facilities requires significant investment. Expanding into new cities or regions can involve costs related to infrastructure, equipment and operational capacity.

At the same time, established companies may use financing to refinance existing obligations or strengthen their balance sheets.

Private credit funds are increasingly positioning themselves as long-term capital partners rather than simply short-term lenders.

This could become particularly important as healthcare companies look to expand while maintaining financial flexibility.

Sector Consolidation Could Create More Opportunities

The Indian healthcare sector is also witnessing consolidation.

Large hospital networks and healthcare companies are expanding their presence through acquisitions, partnerships and new facilities.

This creates additional opportunities for financing.

As companies pursue acquisitions or consolidate operations, private credit can potentially provide structured capital for transactions and business expansion.

The combination of rising demand and sector consolidation is therefore creating a larger opportunity for private credit providers.

Investors may increasingly look for established healthcare businesses with strong operating models and clear expansion plans.

The challenge for companies will be to ensure that growth is supported by sustainable financial structures.

Healthcare’s Defensive Characteristics Stand Out

One of the key reasons healthcare continues to attract attention is its perceived resilience.

Global markets remain exposed to economic uncertainty, changes in interest rates and geopolitical developments.

During periods of volatility, investors often place greater importance on businesses that can demonstrate relatively stable demand.

Healthcare is frequently viewed through this lens.

Demand for medical treatment and healthcare services is generally driven by fundamental needs rather than purely discretionary spending.

This does not mean healthcare companies are immune to financial or operational risks. Regulatory requirements, rising operating costs, workforce shortages and capital-intensive expansion can all create challenges.

However, the underlying demand for healthcare services continues to make the sector strategically important.

The EY report said the strong flow of private credit into healthcare signals investor preference for sectors capable of demonstrating resilience amid global economic and market volatility.

Rising Healthcare Spending Supports the Investment Case

India’s healthcare expenditure is expected to remain an important long-term driver for the sector.

Consumers are becoming more willing to spend on preventive care, specialised treatment and better healthcare services.

Insurance penetration and government health initiatives are also changing the broader healthcare landscape.

As demand grows, healthcare companies will need to continue investing in capacity.

This includes:

• New hospitals and medical facilities
• Advanced diagnostic infrastructure
• Specialised treatment centres
• Digital healthcare technology
• Medical equipment
• Workforce expansion

Each of these areas requires capital.

That creates a growing role for financing providers.

Private credit funds could increasingly become part of the capital ecosystem supporting the next stage of India’s healthcare growth.

Private Credit Could Become a Long-Term Capital Partner

The rise of healthcare as a major destination for private credit may represent more than a short-term investment trend.

As the sector matures, companies could require increasingly sophisticated forms of capital.

Traditional bank financing will continue to play an important role. Equity investors and public markets will also remain significant sources of funding.

But private credit can provide an additional option.

For businesses with established operations and identifiable cash flows, private credit structures can potentially support refinancing, acquisitions and expansion.

According to EY, improving confidence in the healthcare sector could encourage private credit funds to increasingly position themselves as long-term capital partners.

That shift could reshape how healthcare companies finance their growth.

What Healthcare’s H1 2026 Ranking Means

Healthcare accounting for 13% of private credit deal value in H1 2026 is a significant signal about investor priorities.

The sector’s position behind only real estate suggests that private credit investors are increasingly viewing healthcare as a major opportunity.

The trend is supported by several structural factors:

• Rising healthcare expenditure
• Growing demand for quality medical services
• Expansion of hospital networks
• Increased sector consolidation
• Demand for refinancing and growth capital
• The perceived resilience of healthcare businesses

Together, these factors are strengthening healthcare’s investment profile.

The Outlook for Healthcare Private Credit

The momentum seen in H1 2026 could continue if healthcare companies maintain strong operational performance and demand for medical services continues to rise.

Private credit investors will likely remain selective.

Stable cash flows, strong governance, sustainable debt levels and credible expansion strategies will remain important considerations.

For healthcare companies, access to alternative capital could provide greater flexibility as they navigate an increasingly competitive market.

For investors, the sector offers exposure to a long-term growth story supported by structural demand.

The bigger takeaway from the EY report is that healthcare is no longer being viewed solely as a social infrastructure sector.

It is increasingly becoming a significant destination for institutional capital.

With private credit investors seeking businesses capable of delivering resilience and scalable growth, India’s healthcare sector is emerging as an increasingly important part of the country’s evolving private capital landscape.