Super Religare Labs Withdraws IPO; To Refile With New Shareholding


  • 23 May 2011

Avigo Capital and Sabre Capital-backed diagnostics firm Super Religare Laboratories(SRL) has withdrawn its documents filed with market regulator Sebi for its proposed maiden public issue that will delay the initial public offer (IPO).

Nomura Financial Advisory & Securities (India) Pvt Ltd, the lead manager to the issue, that had filed the draft prospectus in mid February, has pulled out the prospectus on May 9. Kotak Mahindra Capital and Religare Capital Markets are the other two book running lead managers for the issue.

This follows a string of large equity transactions related to SRL including the strategic move by the promoters where the billionaire brothers Malvinder and Shivinder Singh sold their personal stake in the privately owned firm to public listed group firm Fortis Healthcare (India) Ltd besides two private equity deals.


According to a report in Business Standard, Sebi asked the firm to refile the documents with new shareholding structure and the company plans to reapply within the next 4-6 weeks. Sanjeev Chaudhry, chief executive officer at SRL, said in the report that the firm will also update its results for the financial year ended March 31 in the revised application.

SRL filed for an IPO on February 17, 2011, in which it proposed to issue upto 28 million equity shares of face value Rs 10 each (including a private placement of up to 8 million equity shares through a pre-IPO placement) through a book building process.

In April, it raised Rs 100 crore by selling 9.27 per cent to Avigo Capital Partners, an SME focused private equity fund. It followed it with a fresh fund raising of Rs 50 crore from Sabre Capital early this month. Two weeks ago the company also completed a previously announced deal where the promoters sold their stake to a group firm.


Fortis Healthcare acquired 74.59 per cent held by the promoters in SRL for Rs 803 crore. The firm had earlier said this transaction value was benchmarked to the deal where Avigo Capital put in fresh money into the company.

SRL, that had acquired Piramal Diagnostic Services last year to became the largest diagnostic company in the highly fragmented local diagnostic services market, plans to use a portion of the proceeds of the public issue to repay/retire liabilities of both the acquired firm and debt on its books.

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.


As of December end, 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.

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