Neuberg Diagnostics Pvt. Ltd plans to raise 1,500 crore through an initial public offering to expand its operations in India and overseas, said a person with knowledge of the matter.
Healthcare giant GSK Valu-led diagnostics chain has appointed Kotak Investment Advisors Ltd and ICICI Securities Ltd as investment bankers to manage the IPO, said the person requesting anonymity.
Newberg Diagnostics is one of India’s top pathology laboratory chains with over 150 laboratories and over 2,000 collection centers. It is also present in South Africa, USA and UAE.
The company, which is looking to expand its operations, has been planning an IPO for some time now. In an earlier interview, Velu, chairman of Newberg Diagnostics, had indicated plans for an IPO by the end of the financial year or during the first quarter of FY24, depending on market conditions.
Markets that were volatile following Russia’s invasion of Ukraine have stabilized, boosting investor confidence. More than a dozen companies have gone public since September. The IPO involves Global Healthcare Limited, whose issue size is 2,205 crores; and Archean Chemical Industries Ltd., Five-Star Business Finance Ltd. and Fusion Micro Finance Ltd., with issue sizes of 1,100-1,600 crores. Others, such as Inox Green Energy, Bikaji Foods International Limited and Kayans Technology India Limited, also completed their IPOs.
However, share prices of diagnostics stocks such as Dr Lal PathLabs Ltd., Thyrocare Technologies Ltd. and Metropolis Healthcare Ltd. have been under pressure during the last one year due to intense competition from new entrants, especially online service providers like Healthians, Tata 1mg and others. Is. , Revenue has also been affected due to the decrease in Covid testing. However, non-Covid revenue is growing well.
Analysts said some new-age firms increased prices, and they expect the trend of rising prices to continue, which may provide some relief to the pricing pressure in the industry. BNP Paribas analysts said competition from low-cost service providers is not a structural threat as diagnostics has been a largely fragmented and unorganized industry in India, and low-cost players have been around for a long time. The major segment targeted by new age companies is preventive health, which accounts for only 10% of the total market.
Listed diagnostic companies also benefit from the shift from unorganized to organized sector. At the same time, consolidation continues, and companies are expanding their reach and regional presence through organic routes.
Neuberg also made several acquisitions, including Bengaluru-based Ananda Diagnostics, Ahmedabad-based Supratech Micropath, Pune-based AG Diagnostics, Chennai-based Ehrlich Lab, and a few others.
Its plans include expanding to the northern and eastern regions of India and overseas markets. Bharat Times