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Carlyle-backed Metropolis Healthcare's IPO nears halfway mark on second day
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Pathology chain owner Metropolis Healthcare Ltd’s initial public offering (IPO) nearly reached the halfway mark on its second day on Thursday, with continued demand from institutions and retail investors. The IPO will close on Friday.

The public offering of 7.66 million shares, excluding the anchor allotment, received bids for nearly 3.6 million shares. The book was subscribed 48% at the end of day two, stock-exchange data showed.

The qualified institutional buyers’ (QIBs’) category saw demand for nearly 2.6 million, or 65%, shares out of 4.01 million shares set aside for them. Three-fourths of the overall IPO size is allocated to institutions, and the bucket needs to be fully subscribed for the offer to sail through.

The quota of shares reserved for retail investors was covered 75%, while non-institutional investors such as corporate houses and affluent individuals placed orders for 2.5% of the shares reserved for them.

The IPO was subscribed a little over nine per cent on day one on Wednesday.

On Tuesday, Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) and the private equity arm of Edelweiss Financial Services Ltd were among investors that acquired Metropolis’ shares in the anchor allotment.

In all, Metropolis raised Rs 530 crore ($76.7 million) by allotting six million shares to 26 investors at the upper end of the Rs 877-880 per share price band.

Metropolis has sought a valuation of Rs 4,415.7 crore ($637.6 million) through the IPO.

The Rs 1,204-crore IPO is entirely a share sale by promoter Sushil Shah and private equity investor The Carlyle Group. It will result in a 27.27% stake dilution. The selling shareholders will get all the money raised via the IPO. The company will not receive any proceeds from the offering.

The IPO might help the founders repay the debt they had taken on to buy out private equity firm Warburg, an investment banker had told VCCircle recently.

JM Financial, Credit Suisse Securities (India) Pvt. Ltd, Goldman Sachs (India) Securities Pvt. Ltd, HDFC Bank Ltd and Kotak Mahindra Capital Co. Ltd are managing the public issue.

The overall issue size has been trimmed to 13.68 million shares as against 15.26 million shares at the time of filing of draft papers. Carlyle, which invests in both growth and buyout deals in India out of its Asia funds, will sell 7.41 million shares compared with 10.25 million shares it had proposed to sell last September.

Metropolis will become the third diagnostics chain to list its shares on the stock exchanges. The diagnostics sector had burst into the limelight in late 2015 after Dr Lal PathLabs became the first of its kind to get listed on the bourses. Smaller peer Thyrocare followed in 2016 with a spectacular listing.

Metropolis history dates back to January 1980 when Shah started the pathology business as a partnership firm under Dr VK Desai’s Hospital.

Metropolis now operates in 19 states in India with a strong position in the western and southern regions. It offers a range of clinical laboratory tests used for prediction, detection, diagnostic screening, confirmation and monitoring of diseases.

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