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Do Not See Hyper Competition In Indian Diagnostic Space, Says Metropolis

The initial public offering (IPO) of Metropolis Healthcare – the third largest diagnostic company in India by revenue – opened for subscription today. Ameera Shah, MD of the company, spoke to CNBC-TV18 about the issue and how the funds will be used.

“About 13 lakh shares are sold in the offer for sale (OFS) of which 6 lakh odd are sold by the promoter group and 7 lakh odd by Carlyle,” Shah said on Wednesday.

Talking about the business, Shah said, “I had taken debt in 2015 because we wanted to give Warburg Pincus an exit and therefore I had acquired the shares from them so I had taken debt from KKR to buy out the shares from Warburg which I landed up refinancing with KKR about a year ago and now the idea is to pare down most of that debt which is what the proceeds of the OFS will go towards.”

“Carlyle today has about 14-15 lakh shares and they are looking to sell about 7-7.5 so they are exiting almost 50 percent of their stake. The number of shares in the company, they will be in statutory lock-in in for one year, whether they choose to sell after that or not is up to them, but there is no right to buy out Carlyle share by Metropolis,” she added.

On the growth front, she said, “We don’t see hyper-competition in the diagnostic space in India.”

“We are comfortable at the current growth rates that we have, the current margins that we have. We do believe that there is still a great opportunity for Metropolis to continue to expand in the 5 major cities like Mumbai and Chennai and cities like that where we feel we are nowhere close to the market share that we believe that we could build,” Shah added. – CNBC TV18