Pathology chain owner Metropolis Healthcare Ltd’s initial public offering (IPO) was subscribed almost six times on the third and final day on Friday as wealthy investors joined retail and institutional players in the scramble for a piece of the business.
The IPO of 7.66 million shares, excluding the anchor allotment, received bids for 44.46 million shares, with the book getting subscribed 5.81 times, stock-exchange data showed.
The qualified institutional buyers’ (QIBs’) category saw demand for nearly 35.66 million shares, or nine times the 4.01 million shares set aside for them.
The quota of shares reserved for retail investors was covered a little over two times, while non-institutional investors such as corporate houses and affluent individuals placed orders for a little more than three times the shares reserved for them.
The IPO was subscribed a little over nine per cent on the first day on Wednesday. It saw investor interest on Thursday, with the book getting subscribed nearly 50% at the end of the second day.
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. Through anchor investors, Metropolis raised Rs 530 crore ($76.7 million) by allotting six million shares to 26 players 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 was 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, including anchors, was trimmed to 13.68 million shares from 15.26 million shares at the time of filing draft papers. Carlyle, which invests in both growth and buyout deals in India out of its Asia funds, aimed to sell 7.41 million shares compared with 10.25 million shares it had proposed to sell last September.
With the IPO over, 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 strong footprints 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.