IPO Alert: Sahajanand Medical Technologies is all set to go public

The global peripheral intervention market is projected to grow from $3.26 billion in 2020 to $5.89 billion in 2026, at a CAGR of 9.1%. Growth in this sector is driven by a growing geriatric population, rising prevalence of peripheral arterial disease, and technological advancements in the field of stents and balloons.

Peripheral stent implants are often used to hold the artery open, allowing blood to flow through a blocked or clogged artery. India’s peripheral intervention devices market was estimated at $6.3 million in 2020 and is expected to grow at a CAGR of 15.6% from 2021 to 2026, reaching $16.1 million by 2026.

Sahajanand Medical Technologies Ltd recently filed a draft red herring prospectus with the Securities and Exchange Board of India to raise ₹15 billion via an initial public offering.

The Samara Capital-backed company’s IPO consists of a fresh issue of shares aggregating up to ₹4.1 billion and an offer for sale of shares aggregating up to ₹10.8 billion by existing shareholders and promoters.        

The company plans to utilize net proceeds from the offering of around ₹2.55 billion for repayment of certain indebtedness. It will employ ₹403 million to fund the working capital requirements of Vascular Innovations and the remaining will be used for general corporate purposes.

Medical Devices

Sahajanand Medical Technologies is a medical devices company that researches, designs, develops, manufactures, and markets vascular devices globally. As of March 2021, it was among the top five companies in terms of market share, with a strong presence in Germany, Netherlands, Italy, and Poland. It has a direct and distributor sales presence in more than 69 countries.

The Gujarat, Surat-based company offers various products that have gained regulatory approvals in different geographies. The company has also pioneered the use of biodegradable polymer technology in both stents and ultra-thin stents with a 60- micron strut thickness.

Currently, the company offers products that are used in interventional cardiology, i.e., devices used for the treatment of blockages in heart vessels. As of Mar 2021, it has been granted 67 patents globally with a pipeline of additional 17 patents and four design registrations in India.

Key Numbers

For fiscal 2021, Sahajanand’s revenue from operations was at ₹5.88 billion, against ₹4.79 billion a year ago. The company suffered a net loss of ₹723.4 million, versus a net profit of ₹254.4 million last year.

The company derives a significant portion of revenues from products that are sold in markets outside India, including Europe, Asia Pacific, Latin America, the Middle East, and Africa. If there is an increase in the duty levied on the products, it would affect the company’s ability to compete with local manufacturers. The foreign operations expose it to risks like unfavorable trade protection laws, tariffs, and other taxes on exports.