Thyrocare Technologies Ltd, a Mumbai-based company running a chain of diagnostics centres across India, is set to hit the capital market later this month with an initial public offer (IPO) to raise approximately Rs 480 crore.
A Velumani, chairman, Thyrocare Technologies Ltd said it will be a 100 per cent offer for sale and the issue is likely by month-end.
CX Partners, which holds 22 per cent stake in the company, has decided to sell 18.9 per cent of its stake while promoters who hold 65 per cent will be selling 1.1 per cent, which translates to a total 20 per cent stake in the company being put up for sale. According to a merchant banking official, Thyrocare is valued at around Rs 2,400 crore and the 20 per cent stake sale would fetch approximately Rs 480 crore.
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CX Partner is selling most of its holding at an attractive valuation. When it invested in Thyrocare, the company was valued at Rs 540 crore and now the valuation has gone up by over four times. The company posted revenue compounded annual growth rate (CAGR) of over 23 per cent from FY11 to Rs 180 crore in FY15 and Rs 114 crore in the first half of FY16. The earnings (EBITDA) CAGR of nearly 20 per cent has resulted in operating profits of Rs 73 crore in FY15 and Rs 49 crore in the first half of FY16.
“We hope to maintain the same growth momentum for the next five years. While the diagnostic market in India is growing by 16 per cent, organised players are reporting a growth of 20 per cent,” Velumani said.
Since the beginning, Thyrocare has been focusing on preventive and wellness health segments. Velumani said while most companies in this space focus on diseases, their main thrust is on disorders and preventive healthcare. “Unlike our peers, we report biochemistry,” said Dr Velumani, a Coimbatore-born former scientific officer at the Bhabha Atomic Research Centre who specialised in immunodiagnostics.
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The company has its Central Processing Laboratory in Navi Mumbai and five Regional Processing Laboratories where blood samples collected from 1,221 authorised service providers in 483 cities are tested.
A research report by Crisil estimates the wellness and preventive diagnostic services segment was worth Rs 37,700 crore in 2014-15 and is expected to grow at a CAGR of close to 25 per cent over the next three fiscal years to Rs 58,500-61,600 crore.
Thyrocare is valued at around Rs 2,400 crore and the sale would fetch Rs 480 crore