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Dr LalPath Labs IPO covered 65% on first day

08 December, 2015

The initial public offering of diagnostics chain Dr Lal PathLabs Pvt Ltd was covered 65 per cent at the end of day one on Tuesday, led by institutional buyers.

Stock exchange data show that qualified institutional buyers (QIBs) bid for about 1.22 times of their portion of the issue.

The portion reserved for non-institutional investors was subscribed 39 per cent, while retail investors bid for 43 per cent of the part set aside for them.

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. The issue closes on Thursday.

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

The company allotted 34.80 lakh shares at Rs 550 apiece to anchor investors, it said in a statement on Monday.

The anchor investors included investment funds and mutual fund schemes operated by Fidelity, T Rowe Price, JP Morgan, Birla Sun Life Mutual Fund and SBI Magnum Mutual Fund. Mutual fund schemes of DSP Blackrock, ICICI Prudential, Kotak Mahindra and Reliance Capital also invested.

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 this month.

The offer 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 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, and screening for hypertension, heart diseases and diabetes.

In 2014-15, the company collected and processed around 2.18 crore samples from about 9.9 million patients.

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 LalPath Labs IPO covered 65% on first day

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