Carlyle-backed pathology firm Metropolis files for IPO
Photo Credit: Shah Junaid/VCCircle

Metropolis Healthcare Ltd on Friday filed its draft documents for an initial public offering (IPO) that will make it the third diagnostics chain to list on the stock exchanges after Dr Lal PathLabs and Thyrocare Technologies within three years.

The issue will comprise an offer for sale of 15.26 million shares by its promoter and its private equity investor Carlyle, according to the draft red herring prospectus (DRHP).

Last week, VCCircle had reported that the Mumbai-based company was likely to file the DRHP within 10 days.

The diagnostics sector had burst into the limelight in late 2015 after Dr Lal PathLabs became the first company in the space to get listed on the bourses. Smaller peer Thyrocare followed suit the next year with a spectacular listing. Since then reports had continued to surface about the imminent listing of Metropolis as well.

According to Frost & Sullivan, the Indian diagnostics market was valued at Rs 59,600 crore in the financial year 2017-18, and is projected to grow to around Rs 80,200 crore by 2019-20, driven by favorable changes in demographics, improvements in health awareness, increased spend on preventive care, increase in lifestyle-related ailments and other factors.

Here's a snapshot of the Metropolis IPO:


The public issue is an offer for sale by the company's promoter Sushil K Shah and Carlyle. Shah will sell up to 5.01 million shares while Carlyle will sell up to 10.25 million shares. 

Use of proceeds

The selling shareholders will get all the money raised via the IPO. The company will not receive any proceeds from the offering.


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


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

The diagnostics company operates in 18 states in India with a strong position in western and southern regions. It offers a range of clinical laboratory tests used for prediction, detection, diagnostic screening, confirmation and monitoring of diseases.

The company follows a hub-and-spoke model. It had a network of 106 clinical labs, 1,130 patient touch points, 8,500 pick-up points and 520 assisted referral centres as on 31 March 2018. During the last financial year, the company conducted around 16 million tests from about 7.7 million patient visits.

Outside India, it has laboratory operations in Ghana, Kenya, Zambia, Mauritius and Sri Lanka. In addition, the company has entered into agreements with third parties for collection and processing of samples in Nepal, Nigeria, the UAE and Oman.

The company received its first external funding of Rs 35 crore from ICICI Venture in 2005. This was followed by $85 million from private equity firm Warburg Pincus, providing an exit to ICICI Venture. In 2015, the founding Shah family bought the 27% stake of Warburg Pincus for Rs 550 crore with the backing of KKR India.

Later in 2015, the company brought marquee investor Carlyle on board when the PE firm bought co-promoter GSK Velu's stake for around Rs 900 crore. 

An IPO might help the founders repay the debt they had taken to buy out Warburg, an investment banker had told VCCircle recently.


The company reported consolidated total income of Rs 651.55 crore for the year ended 31 March 2018 compared with Rs 567.65 crore and Rs 490.63 crore for 2016-17 and 2015-16, respectively. It clocked a net profit of Rs 109.74 crore in the last fiscal year, as compared with Rs 107.25 crore and Rs 81.95 crore in the previous financial years.

Leave Your Comment(s)