Leading medical devices firm Sahajanand Medical Technologies , which is backed by Morgan Stanley Private Equity Asia and Samara Capital, has filed its draft red herring prospectus (DRHP) with market regulator Sebi to raise around Rs 1,500 crore via an IPO, industry sources in the know told Moneycontrol. It specializes in the manufacture of cardiac stents and has no listed peer currently.
This is the second filing of draft papers in September by a player in the medical devices segment. Recently, private equity firm Apax Partners-backed Healthium Medtech, a medical consumables and surgical sutures firm, had also filed its DRHP with Sebi to raise capital via an IPO.
According to the DRHP, which has been reviewed by Moneycontrol, the net proceeds of the offer by Sahajanand Medical Technologies will be used to reduce debt of the company and its subsidiaries, fund the working capital requirements of an indirect foreign subsidiary and for general corporate purposes.
The IPO is a combination of a fresh issue of shares of around Rs 410 crores and an offer for sale component of Rs 1,089 crore. It will also provide a partial exit to the investors Morgan Stanley Private Equity Asia and Samara Capital who hold 18.44 percent and 36.59 percent, respectively, in the company.
Axis Capital, BofA Securities, Edelweiss Financial Services and UBS are the investment banks working on the IPO. Indus Law, Trilegal and Shardul Amarchand Mangaldas are the legal advisors.
Sahajanand Medical Technologies which is headquartered in Surat (Gujarat) researches, designs, develops, manufactures and markets vascular devices globally. It has a leading market share of 21%, 25% and 31% in Fiscals 2019, 2020 and 2021, respectively, of the total DES ( drug eluting stent) sales volume in India. It counts itself amongst the top five companies in terms of market share (by sales volume of DES) in each of Germany, Netherlands, Italy and Poland, as of March 31, 2021 according to Frost & Sullivan.
The Market Potential
According to the DRHP, the COVID-19 pandemic initially halted elective surgeries for few quarters across the world, in 2020. This resulted in decline in volume of procedures conducted annually.
“But post the initial decline, volume of procedures increased in the last quarter of 2020 and is expected to grow steadily. This will catalyze the growth of the total vascular devices market at a CAGR of 8.6% between 2021 and 2026. Global prevalence of cardiovascular diseases almost doubled from 271 million in 1990 to 523 million in 2019,” the DRHP said.
Growing disease prevalence combined with heightened awareness, diagnosis and treatment, has triggered the growth of the global vascular device market, which is expected to reach USD 23.0 billion by 2026, it added.
Moneycontrol could not connect with Sahajanand Medical Technologies and its advisors for an immediate comment.
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