IPO Alert: Healthium Medtech files draft papers as it looks to raise funds

Healthcare is amongst the fastest-growing sectors in India, both in terms of revenue and employment. The Indian healthcare industry is expected to grow at a combined annual rate of about 14% in the next four years, reaching $96 billion by 2025.

Around 63% of the hospitals in the country operate in the private sector. However, organized private corporate hospitals account for less than 10% of that.

Healthium Medtech Ltd. recently filed draft papers with the Securities Exchange Board of India to raise funds via an initial public offering. The IPO comprises a fresh issue of equity shares worth ₹3.9 billion and an offer for sale of up to 39.10 million shares by existing shareholders and promoters.

Healthium intends to use around ₹500.90 million from the net proceeds towards repayment of certain borrowings availed by it. The company plans to invest ₹690.42million in Sironix by way of equity infusion. Further, ₹836.23 million will be invested in Sironix, which the latter will invest in Clinisupplies by way of equity infusion. The remaining amount would be used for general corporate purposes.

Company Profile

Healthium is a global medtech company focused on products used in surgical, post-surgical, and chronic care procedures. The company, which operates in India, the UK, and the rest of the world, has four focus areas namely, advanced surgery, urology, arthroscopy, and wound care.

The Bengaluru-based firm has a comprehensive product platform, with over 52,000 SKUs addressing the varied needs of its customers and patients.

Healthium has 21 patents in India and 11in the US. Further, it has 22 and six patent applications pending approval in India and the US, respectively, as of July 2021. The company has eight manufacturing facilities, of which seven are located in India and one in China.

Key Figures

In FY2021, the company’s total revenue from operations stood at ₹7.13 billion against ₹6.39 billion a year ago. Net profit came in at ₹854 million versus ₹368 million a year ago. EBITDA margin was 21.58%, compared with 14.95% last year.

A substantial portion of Healthium’s products is exported and sold in the international market. The destination countries may impose varying duties, tariffs, and other levies on the products, which would affect pricing and the company’s ability to compete with rivals who coordinate delivery and supplies from strategically located manufacturing facilities in a cost-competitive manner. It will also result in higher operating costs and impact cash flows.