Thyrocare Technologies Ltd, India's largest thyroid testing company, is looking at an initial public offer or a stake sale to a strategic investor which can provide an exit to its existing private equity investor CX Partners, A Velumani, founder and chairman of the firm, told VCCircle.
CX Partners had invested in the company in 2010, picking up the stake from promoters while bringing some money into the company through a primary infusion.
It had made a partial exit from Thyrocare by selling a portion of its stake to Emerging India Fund last year. It currently owns 27 per cent stake in Thyrocare.
“I have a reason to believe that investors are looking at an exit and they would be looking at an exit either this year or the next. They are awaiting the right valuation, once they get the right offer they are likely to make an exit,” said Velumani.
He said CX Partners is looking at a valuation of around Rs 2,000 crore for Thyrocare.
“Given a choice, everyone wants a high return but at the same time the banker needs to advise on the bandwidth for share sale,” said Velumani.
The firm is looking at both an IPO or bringing in a strategic investor. If the firm does go ahead with an IPO it won’t dilute more than over 25 per cent, he added.
Previous media reports had said the firm is in talks with bankers for the proposed public float after a previous secondary deal where Aditya Birla PE was to buy part of the stake held by CX Partners did not materialise.
Velumani clarified, “I am not in talks with anyone (bankers) at the moment; my investors might be, in order to sell their stake but as of today, I am not.”
Thyrocare has a unique business model as it follows a B2B approach with centralised testing laboratories which restricts costs structure. The company has also controlled its capex by not opening retail stores like its peers but franchising, with over 600 aggregators throughout the country.
(Edited by Joby Puthuparampil Johnson)