Mumbai Capital

Healthcare companies hit the capital market

Devi Shetty (right), Chairman, Narayana Hrudayalaya, along with Ashutosh Raghuvanshi, MD & CEO, announcing the company’s initial public offer in Mumbai on Thursday.—Photo: Paul Noronha

Devi Shetty (right), Chairman, Narayana Hrudayalaya, along with Ashutosh Raghuvanshi, MD & CEO, announcing the company’s initial public offer in Mumbai on Thursday.—Photo: Paul Noronha  

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Healthcare companies are in focus as investors and promoters of three such entities are betting on the capital markets for a profitable exit from their investments made in entities that manage hospitals, diagnostic laboratories and pharmaceutical products.

The public issues of two companies- Alkem Laboratories Ltd and Dr. Lal Pathlabs Ltd — closed for subscription on Thursday while the initial public offer (IPO) of the Bengaluru-based Narayana Hrudayalaya Ltd will open for subscription next week on Thursday.

The issues that have already opened for subscription are seeing good investor interest as well.

The IPO of Alkem Laboratories and Dr Lal Pathlabs was subscribed nearly 45 times and 33 times respectively till 7 p.m. on Thursday. The final subscription numbers will change slightly since the final binds take time to be collated.

Investment bankers managing some of these transactions say that healthcare has always been looked upon as a defensive or safe bet and with markets behaving in a volatile manner in the recent past; investors are ready to place bets on health care and pharmaceutical entities.

S. Subramanian, managing director, investment banking, Axis Capital, says that these companies have a strong track record and also high growth rates and so there is strong investor interest.

“Most companies also have strong cash flows and historically these sectors (healthcare and pharmaceutical) have given good returns to investors,” he said on the sidelines while launching the IPO of Narayana Hrudayalaya.

The common theme among the three issues is that existing investors or promoters of the respective companies are trying to profit from their investments by selling their shares to the general public.

In the case of Alkem Laboratories, a total of 18 individuals are diluting their stake in the company by selling the shares as part of the IPO.

Similarly, Dr Lal Pathlabs will see a few promoter entities selling their shares along with investors such as Wagner Ltd, WestBridge Crossover Fund, LLC, and Sanjeevini Investment Holdings.

Meanwhile, Narayana Hrudayalaya will see JP Morgan Mauritius Holdings, among others, selling its shares to the public to make an exit from its holdings.

While the IPO size of Dr Lal Pathlabs is approximately Rs 640 crore, Alkem Laboratories and Narayana Hrudayalaya will raise Rs.1,400 crore and Rs.613 crore, respectively. The IPO of Narayana Hrudayalaya will open on December 17 and close on December 21.

According to primary market tracker Prime Database, a total of 18 companies are in the pipeline for launching their IPOs to raise a cumulative amount of almost Rs.7,900 crore. It includes Healthcare Global Enterprises Ltd, a Bengaluru-based pharmaceutical company.



The common theme is that investors or promoters are trying to profit from their investments



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Printable version | Jan 24, 2020 8:08:11 AM | https://www.thehindu.com/news/cities/mumbai/business/healthcare-companies-hit-the-capital-market/article7973999.ece

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