Me­trop­o­lis Health­care mulls $230-mil­lion IPO

Financial Chronicle - - COMPANIES - P R SANJAI & ARI ALTSTEDTER

ME­TROP­O­LIS Health­care, an op­er­a­tor of med­i­cal di­ag­nos­tic cen­ters backed by Car­lyle Group, is con­sid­er­ing an ini­tial pub­lic of­fer­ing to raise about Rs 1,500 crore ($230 mil­lion) as it seeks ac­qui­si­tions.

The sale will likely in­clude a par­tial stake held by the founders as well as new shares, man­ag­ing di­rec­tor Ameera Shah, 38, said. A time frame for the of­fer­ing has not been set and the com­pany hasn’t ap­pointed an ad­viser for the sale, she said.

Shah is look­ing to raise the pro­file of the di­ag­nos­tic chain as the Mum­bai-based com­pany scouts for takeover tar­gets. Grow­ing af­flu­ence in In­dia and an in­creas­ing num­ber of peo­ple tak­ing health in­sur­ance are spurring de­mand for pri­vate med­i­cal ser­vices and giv­ing com­pa­nies such as Me­trop­o­lis an edge over stand­alone test cen­ters.

“The key driv­ing fac­tors for growth for Me­trop­o­lis would be test-menu ex­pan­sion and cen­ter ex­pan­sion,” Shah said on Mon­day, cit­ing ad­di­tions of tests such as one for di­ag­nos­ing breast can­cer. “We are also wit­ness­ing sub­stan­tial growth in the pre­ven­tive and well­ness seg­ment.”

List­ing of Me­trop­o­lis’s shares will pro­vide a “stock cur­rency” that can be used to fund ac­qui­si­tions, Shah said.

Shah said she will use pro­ceeds from the sale of shares held by the fam­ily to re­pay debt taken to buy out a pri­vate eq­uity in­vestor about three years ago. The busi­ness was set up by Sushil Shah, Ameera Shah’s fa­ther, in 1981 as a sin­gle-lab­o­ra­tory clinic.

Com­pa­nies such as Dr Lal PathLabs and Thy­ro­care Tech­nolo­gies have ben­e­fited from de­mand for pri­vate med­i­cal di­ag­nos­tic ser­vices. Rev­enue at Dr Lal PathLabs, which op­er­ates a na­tional lab­o­ra­tory and cen­ters across the coun­try, more than dou­bled in the four years through March 2017.

Me­trop­o­lis, which cur­rently op­er­ates 2,000 cen­ters, has plans to add 700800 more in the fi­nan­cial year started April 1 to en­hance its foot­print in In­dia, ac­cord­ing to Shah.

"List­ing of Me­trop­o­lis’s shares will pro­vide a “stock cur­rency” that can be used to fund ac­qui­si­tions"

Pi­naki Paul

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