Chennai’s reputation as India’s healthcare capital has long rested on its hospitals and medical tourism. Increasingly, however, it is also becoming a destination for growth capital. Recently, Iswarya Fertility Center, a city-based IVF chain, secured more than `350 crore (about $37 million) from global healthcare investor OrbiMed Asia—one of the largest private equity investments in India’s fertility sector. The capital is to finance the company’s expansion across India and its planned entry into West Asia and other overseas markets.This transaction is notable for its size, and for what it signals. Despite building a network of over 80 centres across eight states over four decades, the fertility care provider had never tapped private equity before. The transaction reflects a strategic shift by the company’s second-generation leader, managing director Arun Muthuvel, who opted for patient capital over conventional bank financing. His rationale: unlike loans that demand quick repayment, private equity provides healthcare businesses with time they need to mature—an advantage in a sector where new hospitals, clinics often take three to four years to become profitable.Increasingly, firms in TN are turning to private equity to fund their growth. Data from research firm Venture Intelligence shows TN-headquartered companies accounted for nearly 5.3% of the 642 PE-VC deals in India during the first half (Jan-June period) this year (CY2026). The value of these deals accounted for 2.2% of the $17.5 billion invested through PE-VC transactions during the period. In CY2025, TN companies raised about $3.7 billion, accounting for nearly 10% of the $37 billion worth of PE-VC investments. TN accounted for 5.9% of the 1,342 deals recorded nationwide last year. The PE-VC deals exclude those relating to real estate.“PE investments in TN are on the rise YoY, accounting for around 10% of the national total by value. In the case of startups that typically do not have collateral, equity funding is the preferred mode. For more mature companies, factors ranging from the need for strategic and financial guidance to valuation-benchmarking (before IPO) play a role in raising PE capital,” Arun Natarajan, founder, Venture Intelligence, said.He points out that PE-VC investors tend to hold a 15%–50% stake by the time the company reaches IPO stage, though this varies by company maturity, sector, and funding history. He says buyout stage investors take a majority stake. A hardware or manufacturing company will require more initial capital than a software startup, he added.Natarajan notes that investments by VC firms in startups based in Chennai is relatively lesser than those in Bengaluru and NCR. He suggested that Tamil Nadu govt could promote the Fund of Funds (FoF) to attract PE-VC investors. “Several state govts, including neighbouring Kerala, have sponsored FoF to attract PE-VC investors to their states. Under the FoF playbook, the govt only invests up to 50% of a PE-VC fund corpus, and the fund manager has to raise the remainder of capital from private market sources – making them that much more accountable,” he added.PE-VC investors bring strategic guidance, industry expertise and governance support, having backed similar businesses elsewhere. Experts say the arrangement creates a win-win situation for both investors and entrepreneurs. They also note that PE investments are no longer concentrated in Chennai but are increasingly spread across TN.C Venkat Subramanyam, founder and executive chairman, Veda Corporate Advisors, said, there are aspects unique to TN when it comes to PE investments. “The depth and breadth of high-quality firms across sectors is something few states can match. Coimbatore is as vibrant a market as Chennai, and places such as Erode, Tirupur, Karur, Salem, and Madurai are home to some fast-growing businesses. PE has penetrated beyond metros in TN, and this augurs well for the state’s development,” he said.He says companies in TN have been active in tapping private equity. “We may not be among top three states in value of PE money raised. That’s partly because some large deals by value were in sectors such as infrastructure, power, data centres, where action in TN is yet to keep pace. But, TN continues to churn out companies, across sectors that tap PE market for fund raising,” he said.Another Chennai-based firm, Indus Valley, a D2C kitchenware brand, raised $17 million (about `161 crore) in a funding round led by private equity firm Gaja Capital last month. Founded in 2016 by Jagadeesh Kumar and Madhumitha Uday Kumar, the company has raised capital from angel investors and venture capital firms over the past decade.Jagadeesh Kumar said investors’ return expectations are key when it comes to PE-VC investments. “Investors’ expectations will always be high as the risk is high at an early stage, and at a later stage their expectations might be slightly lower. Still, you have to deliver growth continuously,” he said.
