Private funding is manna; consolidation is priority: Fortis

Below is an edited transcript of the interview. Also watch the accompanying video.

Q: Of the investment of around Rs 370 crore, what is the contribution if IFC and Jacob Ballas? What is the equity holding or shareholding pattern for Super Religare Laboratories (SRL)?

A: Currently, between IFC and Jacob Ballas the total investment is close to about Rs 370 crore which would result in Jacob Ballas holding 15-16% and IFC holding 7%- 8%. Their investment has resulted in SRL becoming a debt-free enterprise.

Q: How much of this will be pumped to retire debt? How much of this will be used for capex?

A: Over the last one year, we have considerably expanded SRL's network of collection centres from about 810 to about 1,100 around the country. Two more additional labs have been set up within the SRL network. Most of our resources that are flowing in right now will be used to retire the debt of close to about Rs 422 crore.

We are also looking at consolidating the growth with this capital, in terms of creating a much wider network of labs within the country and also consolidating the number of tests at each labs. There is a lot of clinical activity that can be increased with the help of this capital.

SRL's lab in Dubai is operated in association with Fortis. We are looking at expanding the test menu of that lab and there is collaboration with hospitals in Sri Lanka

Q: Where exactly does this leave SRL's IPO plans because you initially filed a prospectus with SEBI, but that was put on hold for a while, considering that you have received so much of private equity funding from 2011? With this funding, would you still be open for an IPO?

A: Yes. I think we are committed to take SRL public and we will certainly do that because it is going to help the company even better. Therefore, I think it all depends on market conditions. But we are committed to that process and will execute it when the timing is right.

Q: When and by how much will you raise via an IPO? What sort of equity dilution will you be comfortable with regarding the promoters' holding in SRL?

A: I think that is a function of the markets. Announcing the terms of the dilution and capital outlay for the IPO now would a little premature at this point of time because it is based on market conditions and forces.

As far as the promoter holding is concerned, Fortis will continue to be holding more than about 55% in the company.

Q: You have been quite aggressive on inorganic growth. What are your plans for inorganic growth?

A: I think as far as inorganic growth is concerned, it depends on the right opportunities. But right now our priority is consolidation. We have conducted a lot of inorganic activity over the last 16-18 months. This year, our focus is on improving operating performance within the company.