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Dr Lal PathLabs IPO oversubscribed 32 times

10 December, 2015

The initial public offering of diagnostics chain Dr Lal PathLabs Pvt Ltd, which is backed by private equity firms WestBridge Capital Partners and TA Associates, was oversubscribed 32 times at the end of the issue, data from stock exchanges showed on Thursday. 

The bumper subscription was led by qualified institutional buyers (QIBs) and non-institutional investors, who applied for 63.55 times and 61 times, respectively, the number of shares reserved for them. The portions kept for retail investors was oversubscribed around three times at the end of the day.

The QIBs had led the show on the first day when the firm hit 65 per cent subscription mark and remained the driver of the issue on the second day, too. On the other side, the portion reserved for non-institutional investors was subscribed 78 per cent, while retail investors’ portion was oversubscribed 55 per cent on the second day.

The operator of the second-largest medical diagnostics services chain in the country opened its IPO in a price band of Rs 540-550 per share.

Earlier, the company raised Rs 191 crore ($28.6 million) by selling shares to anchor investors ahead of its IPO.

The firm had filed its draft red herring prospectus with the capital markets regulator Securities and Exchange Board of India to float the IPO in September and received approval earlier last month.

The issue comprises an offer for sale by its two private equity investors—TA Associates and WestBridge Capital—besides the promoters. They will collectively sell 11.6 million shares, or a 14.1 per cent stake, in the firm.

The IPO would make it one of the first prominent diagnostics chains to go public and may pave the way for others who have been waiting in the wings such as SRL Diagnostics and Thyrocare.

VCCircle was the first to report that the diagnostics firm was looking for an IPO and had named at least one banker to manage the issue.

Founded in 1949, Dr Lal PathLabs provides diagnostic and related healthcare tests and services. These include routine clinical laboratory tests such as blood chemistry analyses and blood cell counts; specialised testing services like histopathology analyses, genetic marker-based tests, viral and bacterial cultures and infectious disease tests; as well as screening for hypertension, heart diseases and diabetes.

As of March 31, 2015, the firm had 163 clinical laboratories, 1,340 patient service centres and more than 5,000 pick-up points.

Kotak Mahindra Capital and Citigroup are managing the offer.


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Dr Lal PathLabs IPO oversubscribed 32 times

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