Super Religare Laboratories To Raise $50M More In PE Funding

By Shrija Agrawal

  • 17 Oct 2011

Avigo Capital and Sabre Capital-backed diagnostics firm Super Religare Laboratories (SRL), which recently withdrew its IPO is raising $50 million(~Rs 245 crore) in private equity funding, atleast two sources with the direct knowledge of the development told VCCircle.The company is raising money primarily to fuel its inorganic growth.

Sources add Jacob Ballas Capital and Olympus Capital are likely to be the lead contenders for the deal even as it’s too early to pick them. SRL, the country’s top diagnostics firm, has received interest from a dozen private equity players and other investors including Q-Investments, GE Healthcare and IFC.

The prospective investors have shown significant interest in the company and according to one person close to the talks the deal value could be at 30 per cent  to the last round of funding. Last year SRL acquired Piramal Diagnostic Services Pvt Ltd for $128 million to strengthen its presence in the radiology services that also made it the biggest diagnostics chain in the country, ahead of firms like Dr Lal Pathlabs.


In April this year, Avigo Capital, a mid-market private equity fund picked up 9.27 per cent of the post investment equity share capital of the company for Rs 100 crore. Two weeks later, Sabre Capital put Rs 50 crore in the diagnostics firm at Rs 203 per share as against Rs 188 a piece at which Avigo invested. Currently, the company is working with annualised revenues of close to Rs 600 crore.

Billionaire brothers Malvinder and Shivinder Singh, the promoters of SRL, recently sold their 86 per cent stake in SRL to the listed Fortis Healthcare (India). Fortis Healthcare acquired 74.59 per cent held by the promoters in SRL for Rs 803 crore.

Given the series of shareholding changes, SRL was reportedly asked to refile the documents for its proposed public issue. While the company had said it will refile with updated financials, the issue looks to be pushed back. The proposed PE funding is likely to take care of immediate funding needs.


It had plans to use a portion of the proceeds of the public issue to repay/retire liabilities from the Piramal acquisition as also the debt on its own book.

As of December 31, 2010, SRL’s diagnostic laboratory network comprised eight reference laboratories, seven centers  of excellence, 181 network laboratories (comprising 164 pathology and 17 radiology labs), 15 wellness centres and 888 collection centres. Out of 164 pathology laboratories, 53 are owned by SRL, 31 are managed by it (including 14 based in hospitals run by group firm Fortis Healthcare Limited), 55 are joint venture labs and 25 are franchisee labs.

Of its 17 radiology laboratories, 16 are owned by SRL and it operates and manages one radiology laboratory based in a hospital. Six of its reference laboratories are based in India, with the seventh reference laboratory located in Kathmandu, Nepal. It has entered into a service agreement for one reference laboratory in the Dubai Healthcare City.


The pathology market is currently 2.5 per cent of the overall healthcare delivery market. There are 40,000 independent path labs in the country and the industry is highly competitive and price-driven. Around 70 per cent of treatment decisions in the country are based on lab results. Indian healthcare industry is a $35 billion market projected to grow at 15 per cent per annum.s

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