Shalby Ltd, which runs a multispecialty hospital chain under the same name, raised Rs 150.53 crore ($23.33 million) from a bunch of anchor investors including private equity firm Indgrowth Capital and investment banking major Goldman Sachs ahead of the initial public offering (IPO).
The Ahmedabad-based multispecialty hospital chain sold 6.07 million shares to 13 anchor investors at Rs 248 per share, according to stock exchange filings.
VCCircle reported that Indgrowth struck its maiden investment by acquiring shares of oncology chain HealthCare Global Enterprises Ltd worth Rs 35 crore (5.4 million) through a fresh issue. Indgrowth was founded by former India Build Out Fund and TPG Growth executive Varun Kapur. Indgrowth has been on the road to raise a Rs 670 crore-fund to invest in publicly listed companies not covered by analysts.
The anchor investors also included foreign institutions such as Citigroup Global Markets Mauritius, HSBC Global Investments and Nomura Singapore.
Anchor investors are institutional investors who accept a one-month lock-in period for a sizeable allocation of shares and support a public offering. Their participation highlights investors’ confidence in an IPO and sets a benchmark for the investor community at large.
Avendus Capital’s hedge fund, the Absolute Return Fund, IIFL Growth Fund, Axis Mutual Fund and Kotak Mutual Fund were Indian asset managers participating in the anchor allotment.
Reliance Nippon Life Insurance Co and SBI Life Insurance Co were Indian insurers who bought Shalby shares in the IPO.
Shalby is seeking Rs 2,678.64 crore ($415.29 million) in valuation from the IPO.
Shalby has fixed a price band of Rs 245-248 apiece for an IPO size of Rs 504.8 crore ($78.26 million), the company announced last week.
The firm has trimmed the issue size by Rs 100 crore. It now comprises a fresh issue of shares worth Rs 480 crore besides a secondary sale of shares worth Rs 24.8 crore by the promoter Vikram I Shah.
The company had proposed to issue fresh shares worth Rs 580 crore, as per its draft red herring prospectus filed with the regulator.
The IPO will see an 18.84% stake dilution on a post-issue basis. Based on the upper-end of the price band, promoters’ holding post the IPO will fall to 79.4% from 97.86%.
Promoters will get three years from the date of listing to meet regulatory guidelines for a minimum public float of 25% set for listed firms in India.
VCCircle had first reported in September last year that Shalby was eying an IPO and was in the process of hiring merchant bankers.
The firm had earlier explored raising capital via private equity funds, but then decided to list as it would allow it to raise more money.
Edelweiss Financial Services, IDFC Bank and IIFL Holdings are the merchant bankers managing Shalby's IPO.
Shalby will be part of a growing number of healthcare companies that have opted to raise capital via an IPO in recent times.
Bengaluru-based hospital chain Narayana Healthcare raised $95 million through a public offering in December 2015 while oncology chain HealthCare Global Enterprises Ltd went public in March 2016 with a $100-million IPO.
Aster DM Healthcare also filed a draft proposal in July 2016 for a $300-million listing. It, however, postponed its IPO plans and refiled its fresh IPO documents with the Securities and Exchange Board of India in August with a reduced issue size.
Within the broader pharmaceutical and healthcare space, Biocon Ltd’s contract research services arm Syngene International Ltd went public in July 2015. Alkem Laboratories Ltd, India’s fifth-largest drugmaker as per domestic sales, tapped primary markets in December 2015 with a Rs 1,350-crore IPO followed by Warburg Pincus-backed Laurus Labs in November 2016.
Eris Lifesciences is the most recent pharmaceutical company to go public with a Rs 1,741 crore IPO in June this year.
For more details of Shalby’s IPO, click here.