GSK Velu’s Neuberg Diagnostics in talks with 360One, M&G Investments for $100 mn pre-IPO fundraise 

Neuberg Diagnostics is one of India’s major diagnostic service providers, with a presence not just in the Indian market but also in the UAE, South Africa and US.

Neuberg Diagnostics is in talks with a consortium of investors, including funds managed by wealth manager 360One and M&G Investments, to raise up to $100 million, people aware of the development told Moneycontrol.

Moneycontrol first reported on 17 April that the diagnostics chain had hired investment bank o3 Capital to help raise funds from private equity investors.

The company promoted by GSK Velu, who was an investor in diagnostic chain Metropolis Healthcare, will use the proceeds of this pre-initial public offering fundraising to bolster its merger and acquisition (M&A) bid as it looks to become one of the largest diagnostic chains in the country before going public sometime next year, the people cited above said.

Velu, who had sold his 36.5 percent stake in Mumbai-based diagnostics chain Metropolis Healthcare to private equity investor Carlyle in 2015, is also the promoter of medical equipment manufacturer Trivitron Healthcare and one of the investors in the Tamil Nadu-focused hospital chain, Kauvery Hospital.

In March 2023, a fund managed by 360One invested close to $70 million in Kauvery Hospital. This June, Murugappa Group’s TI Clean Mobility, a three-wheeler electric vehicle maker, announced that it will raise Rs 310 crore from M&G Investments. In 2023, M&G also announced that it would invest $75 million in Vivriti India Retail Asset Fund, India’s first securitisation fund, which aims to expand and improve access to finance for underserved small and medium enterprises (SMEs) and millions of low-income households across the country, with a particular focus on women-owned SMEs.

Neuburg Diagnostics, 360One declined to comment. An email sent to M&G Investments did not elicit a response till the time of publication of this article.

Neuberg Diagnostics is one of India’s major diagnostic service providers, with a presence not just in the Indian market but also in the UAE, US, and South Africa. The chain has the capability to perform over 5,000 varieties of pathological investigations. It provides various health checkup packages — ranging between Rs 1,000 and Rs 8,500.

The diagnostic chain processes over 20 million tests every year, with 33 laboratories in India and abroad.

In the run-up to its planned IPO, last year the company merged Neuberg Supratech Reference Laboratory, Ahmedabad, and Neuberg Anand Reference Laboratory, Bengaluru, with the parent company to streamline operations and enhance efficiency,

Last year, it formed an equal joint venture with Kolkata-based diagnostic chain Pulse Diagnostics to expand its footprint in east India.

Diagnostics deals

In a major M&A deal in the diagnostics space, Dr Lal PathLabs in 2021 acquired Suburban Diagnostics, a chain with a strong presence in western India, in an all-cash deal for an enterprise value of Rs 925 crore.

Suraksha Diagnostic Pvt Ltd, a West Bengal-based diagnostic chain, in July filed its draft red herring prospectus with SEBI (Securities and Exchange Board of India) to raise around $100 million through an IPO. The diagnostic chain’s private equity investor, OrbiMed, is looking to sell a large part of its stake through the IPO.