- Date : 16/02/2023
- Read: 3 mins
SRL Diagnostics plans to launch an Rs. 2,000 crore IPO.
Fortis Healthcare's subsidiary SRL Diagnostics, has private equity investors and is backed by IHH of Malaysia. It has started discussions with investment bankers for getting in advisors for a Rs. 2,000 crore IPO. Its website suggests it is the most significant diagnostic lab chain in India in terms of geographic presence. It is also the only lab with a pan-India presence. After Dr. Lal Pathlabs, it is the second most significant diagnostics chain in our country in revenue.
Also Read: These are the unique features that different health insurers offer.
The Proposed IPO and The Reason Behind It
Experts suggest that many investment banks are trying for the IPO mandate, and the call will be taken soon. Experts suggest that the listing will likely consist of an OFS component, and no final call has yet been taken for the timing or the size of the proposed IPO. However, indicators suggest that the diagnostics giant wants to collect around Rs. 2,000 crores. The primary reason for the IPO is to let the private equity investors exit who want their returns. SRL Diagnostics promoter group owns 57.68%, and other private equity investors like IFC and NY Jacob Ballas hold 31.52%, along with others.
Diagnostics
The peers of SRL Diagnostics have not seen a pretty time on the stock market, and the segment is on the low. Dr. Lal Pathlab decreased by 16.5%, and Metropolis Healthcare fell by 18%, Thyrocare fell by 26.7% in the last three months. 2022 saw Thyrocare lose 44.14% and Metropolis 61.42%.
SRL showed an Rs. 331.5 crore revenue in Q3FY23, less than Rs. 388.5 during the same time last year. Its revenue for Q2FY23 was Rs. 351.2 crores, and the EBITDA was Rs. 71.1 crores. Margins for EBITDA were better than in previous quarters. Fortis Healthcare MD and CEO Dr. Ashutosh Raghuvanshi said the pandemic impacted their diagnostics segment. However, revenues for non-covid grew by 7% for the quarter. He believes the business is showing stability in the changing environment post Covid.
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Conclusion
Dr. Raghuvanshi also stated that SRL would focus on bettering its channels and adding more tests to its menu, such as genomics. It will look to optimize its customer touch point and network parallelly. SRL's website suggests that its network is in 34 union territories and states with over 400 labs, 5000 institutional touch points, and 2500+ service centers for patients across India. SRL also has a presence in Nepal, Afghanistan, and Dubai. It offers imaging and pathology services that doctors use in routine testing and treatment of diseases.
Fortis Healthcare's subsidiary SRL Diagnostics, has private equity investors and is backed by IHH of Malaysia. It has started discussions with investment bankers for getting in advisors for a Rs. 2,000 crore IPO. Its website suggests it is the most significant diagnostic lab chain in India in terms of geographic presence. It is also the only lab with a pan-India presence. After Dr. Lal Pathlabs, it is the second most significant diagnostics chain in our country in revenue.
Also Read: These are the unique features that different health insurers offer.
The Proposed IPO and The Reason Behind It
Experts suggest that many investment banks are trying for the IPO mandate, and the call will be taken soon. Experts suggest that the listing will likely consist of an OFS component, and no final call has yet been taken for the timing or the size of the proposed IPO. However, indicators suggest that the diagnostics giant wants to collect around Rs. 2,000 crores. The primary reason for the IPO is to let the private equity investors exit who want their returns. SRL Diagnostics promoter group owns 57.68%, and other private equity investors like IFC and NY Jacob Ballas hold 31.52%, along with others.
Diagnostics
The peers of SRL Diagnostics have not seen a pretty time on the stock market, and the segment is on the low. Dr. Lal Pathlab decreased by 16.5%, and Metropolis Healthcare fell by 18%, Thyrocare fell by 26.7% in the last three months. 2022 saw Thyrocare lose 44.14% and Metropolis 61.42%.
SRL showed an Rs. 331.5 crore revenue in Q3FY23, less than Rs. 388.5 during the same time last year. Its revenue for Q2FY23 was Rs. 351.2 crores, and the EBITDA was Rs. 71.1 crores. Margins for EBITDA were better than in previous quarters. Fortis Healthcare MD and CEO Dr. Ashutosh Raghuvanshi said the pandemic impacted their diagnostics segment. However, revenues for non-covid grew by 7% for the quarter. He believes the business is showing stability in the changing environment post Covid.
Also Read: This can be a potential multi-bagger in the healthcare sector.
Conclusion
Dr. Raghuvanshi also stated that SRL would focus on bettering its channels and adding more tests to its menu, such as genomics. It will look to optimize its customer touch point and network parallelly. SRL's website suggests that its network is in 34 union territories and states with over 400 labs, 5000 institutional touch points, and 2500+ service centers for patients across India. SRL also has a presence in Nepal, Afghanistan, and Dubai. It offers imaging and pathology services that doctors use in routine testing and treatment of diseases.
