Swaraj Singh Dhanjal

Mumbai: Diagnostic and pathology laboratories chain Dr Lal Pathlabs Ltd on Monday received markets regulator Securities and Exchange Board of India’s approval for its initial public offering (IPO), according to data on the regulators website.

The firm had filed its draft IPO papers on 16 September.

Apart from Dr Lal Pathlabs, several other healthcare firms are planning to raise funds through the IPO route. These include HealthCare Global Enterprises Ltd, Thyrocare Technologies Ltd, Dr Devi Shetty-led Narayana Health and Aster DM Healthcare. Narayana Health and HealthCare Global have filed their IPO papers with Sebi and are awaiting approval.

So far this year, 18 firms have raised almost 11,000 crore through IPOs, according to Prime Database, a primary market tracker. Over 30 firms have filed their draft IPO papers with Sebi.

During the share-sale process, the firm’s existing private equity investors will offer their stake for sale. Wagner Ltd, Westbridge Crossover Fund Llc and Sanjeevini Investment Holdings will offer around 7.49 million shares during the process.

Apart from the private equity investors, the company will issue 11.6 million new shares during the sale and the promoters, Arvind Lal and Vandana Lal, will also participate in the share sale. The offer shall constitute up to 14% of the post-offer paid-up equity share capital of the firm.

On 6 May, Mint had reported that the firm is in talks with investment bankers to launch its share sale programme of nearly 700 crore, which would provide an exit for its investors.

The company has hired Citibank and Kotak Mahindra Capital to manage the issue.

Founded in 1949, the company intends to either take over or merge more diagnostic centres. During fiscal 2014, it acquired Kolkata-based Medicave Medical Systems Pvt. Ltd and Ahmedabad-based APL Institute of Clinical Laboratory and Research Pvt. Ltd.

Approximately 85% of its total revenues for financial year 2015 were generated from northern and eastern India. The company depends on certain specialised tests, namely those for Vitamin D, thyroid and lipid profile, for a significant portion of its revenue. These tests, collectively, contributed more than 10% of its total revenues for the last two financial years.

For the year ended 31 March, the company reported profit after tax of 95.68 crore compared with 63.09 crore for the corresponding period last year. Its revenue from operations stood at 659.59 crore for the same period as compared with 557.95 crore during the previous year, reporting an increase of 18.2%.

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