Thyrocare IPO crosses halfway mark on day 1; Sabre Partners among anchor investors

The initial public offering of Thyrocare Technologies Ltd, India's largest thyroid testing company, was covered 55.13 per cent at the end of the first day of the issue on Wednesday thanks largely to retail investors.

The issue of 7.52 million shares received bids for 4.14 million shares, stock-exchange data show.

Retail investors bid for almost 100 per cent of the 3.76 million shares set aside for them. Institutional buyers subscribed to 11 per cent of the 2.14 million shares reserved for them while non-institutional investors barely bid for their portion of 1.61 million shares.

On Tuesday, the company raised Rs 144 crore ($21.5 million) by allotting 3.22 million shares to a bunch of anchor investors including Sabre Partners.

Sabre Partners pitched in with around Rs 8 crore. The shares were allotted at the higher end of the price band of Rs 420-446 apiece.

Other anchor investors include funds under HDFC MF, Birla Sun Life MF, Fidelity, DSP Blackrock and Tata AIA Life Insurance.

The entire public issue is an offer for sale by the company's promoters and a private equity investor. The issue, which aims to raise up to Rs 480 crore ($72 million), will close on April 29.

Thyrocare CEO A Velumani will sell a 1 per cent stake while PE investor CX Partners, which holds 21 per cent of the company, will offload a 19 per cent stake via the IPO. Other investors Norwest Venture Partners, Emerging India Fund and Samara Capital will retain their holding. Norwest and Samara hold 9.43 per cent and 2 per cent, respectively, of the company.

Thyrocare reported a net profit of Rs 40 crore for the nine months through December 2015 on total revenue of Rs 180.5 crore. For the full year 2014-15, it posted a net profit of Rs 44.4 crore on total revenue of Rs 190.3 crore. 

JM Financial, Edelweiss Financial Services Ltd and ICICI Securities are the investment bankers for the issue.

The Indian IPO market rebounded strongly last year and a string of healthcare firms either launched, filed or got approval from the Securities and Exchange Board of India for public share sales.

Thyrocare rival Dr Lal PathLabs Ltd made a spectacular debut in December, underlining investor interest in the diagnostics segment.

Other healthcare companies including drugmaker Alkem Laboratories Ltd, hospital chain Narayana Hrudayalaya Pvt Ltd and Biocon Ltd's Syngene International Ltd contract research unit also made strong debuts on the stock exchanges. 

Earlier this month, however, oncology chain HealthCare Global Enterprises Ltd (HCG) saw its shares slump on the stock market debut. Analysts say HCG's shares could recover over a period as oncology is a capital-intensive sector requiring a longer gestation period for the facilities to turn a profit. 

Sabre Partners was also among the anchor investors in HCG’s IPO.

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