PE firms to part-exit as Dr Lal PathLabs files for IPO

Dr Lal PathLabs Pvt Ltd, which runs the second-largest medical diagnostics services chains in the country, has filed its draft red herring prospectus (DRHP) with capital markets regulator Securities and Exchange Board of India (SEBI) to float its initial public offer (IPO).

The offer entirely comprises an offer for sale by its two private equity investors TA Associates and WestBridge Capital besides the promoters.

VCCircle was the first to report that the diagnostic firm is looking for an IPO and has fixed at least one of the bankers to manage the issue.

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

SRL, a subsidiary of Fortis Healthcare Ltd, had previously filed its documents for an IPO in 2011. Then owned by billionaire brothers Malvinder and Shivinder Singh in their private capacity, the firm was brought under their public listed hospital chain Fortis Healthcare. The proposed issue was scrapped thereafter. It counts Avigo Capital, Sabre Capital, Jacob Ballas and IFC as shareholders. SRL is the top diagnostics chain in the country.

Here's a snapshot of Dr Lal PathLabs' IPO

* IPO comprises offer for sale by promoters and existing shareholders WestBridge Capital and TA Associates.

Bankers: Kotak Mahindra Capital and Citigroup.


* Founded in 1949, Dr Lal PathLabs provides diagnostic and related healthcare tests and services in India.

* In fiscal year 2015, the company collected and processed around 2.18 crore samples from approximately 9.9 million patients.

* It offers over 3,368 diagnostic and related healthcare tests and services which include diagnostic and related healthcare tests and services including 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 preventive testing services — screenings for hypertension, heart disease and diabetes. 

* As of March 2015, the firm has 163 clinical laboratories, 1,340 patient service centres and over 5,000 pick-up points.


In FY15, its consolidated revenue from operations was Rs 660 crore compared with Rs 558 crore in the previous year. Although the firm is four-fifth the size of bigger rival SRL, it sported the same EBITDA or operating profit last year. Its EBITDA grew around 13 per cent last year to Rs 158 crore. Dr Lal PathLabs' net profit rose to Rs 95 crore from Rs 80 crore for the year ended March 31, 2014.


The firm had raised funding from WestBridge Capital and TA Associates in the past and both the PE firms are part exiting in the offer for sale.

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