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MUMBAI : Entero Healthcare Solutions Pvt. Ltd, a private equity (PE)-backed pharma products distribution platform, has started work on its initial public offering (IPO) to raise capital for expanding its operations, said two people aware of the development.

Entero was established in 2018 by Prabhat Agrawal, a former chief executive officer (CEO) of domestic pharma major Alkem Laboratories, and Prem Sethi to be a supply chain partner and aggregator for pharmaceutical products and medical equipment.

“Entero aims to become the biggest organized supply chain player in the country’s highly fragmented pharma and medical products distribution industry. To this end, the IPO is a tool for the company to raise capital to help it with inorganic growth by acquiring local distributors," said the first person cited above, requesting anonymity as he is not authorized to speak to reporters.

The firm initiated work on its IPO last week and has hired investment banks ICICI Securities Ltd, JM Financial Ltd, Jefferies Group Llc, and Credit Suisse Group AG to work in its draft IPO papers, he added.

Entero is backed by healthcare-focused PE investor Orbimed. Emails sent to Entero founders and Orbimed did not elicit a response till press time.

The company claims to have a presence in 22 cities across the country, supplying products to over 30,000 pharmacies and more than 1,000 hospitals.

In FY20, Entero’s revenue grew to 1,349.7 crore (FY19: 293 crore), owing to organic and inorganic growth, according to rating agency India Ratings & Research in a note in February 2021. “The number of subsidiaries of the company increased to 18 at FYE20 from seven at FYE19, which was its first year of operations. The scale of the operations is likely to grow further in FY21 as the company continues to acquire new companies and increase its sales. The company achieved a revenue of 1,368.9 crore in 9MFY21," the rating agency said.

Entero has a well-diversified product portfolio, including surgical disposables and consumables, medical devices and pharmaceutical products, and a diversified customer profile with the top 10 customers contributing around 8% to revenues, the note said.

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