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Published on 2/04/2019 10:25:09 AM | Source: HDFC Securities Ltd

IPO Note - Metropolis Healthcare Ltd By HDFC Securities

Posted in IPO Reports| #IPO #HDFC Securities

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Background & Operations:

Metropolis Healthcare Ltd (MHL) is one of the leading diagnostics companies in India, by revenue, as of March 31, 2018. It has widespread presence across 19 states in India, as of December 31, 2018, with leadership position in west and south India. Through its widespread operational network, it offers a comprehensive range of clinical laboratory tests and profiles, which are used for prediction, early detection, diagnostic screening, confirmation and/or monitoring of the disease. It also offers analytical and support services to clinical research organizations for their clinical research projects. During the nine-month period ended December 31, 2018, it conducted approximately 12.3 million tests from approximately 6.6 million patient visits as compared to approximately 16.0 million tests from approximately 7.7 million patient visits during the financial year 2018.

MHL offers a broad range of approximately 3,487 clinical laboratory tests and 530 profiles, as of December 31, 2018. The profile comprises of a variety of test combinations which are specific to a disease or disorder as well as wellness profiles that are used for health and fitness screening. It classifies its tests into (i) ‘routine’ tests such as blood chemistry analyses, blood cell counts and urine examination; (ii) ‘semi-specialized’ tests such as thyroid function tests, viral and bacterial cultures, histology, cytology and infectious disease tests; and (iii) ‘specialized’ tests such as tests for coagulation studies, autoimmunity tests, cytogenetics and molecular diagnostics. It is focused on providing reliable test results as well as value-added services such as home collection of specimens and online access to test reports. It also offers customized wellness packages to its institutional customers as per their requirement. MHL’s patient centric approach is a critical differentiator which results in several individuals and healthcare providers choosing it as their diagnostic healthcare service provider.

MHL conducts its operations through its laboratory and service network. It has implemented a ‘hub and spoke’ model for quick and efficient delivery of services through widespread laboratory and service network, which covers 197 cities in India, as of December 31, 2018. As of December 31, 2018, its laboratory network consists of 115 clinical laboratories, comprising (i) a global reference laboratory (“GRL”) located in Mumbai, which is main ‘hub’ and equipped to conduct majority of the tests offered by it; (ii) 14 regional reference laboratories (“RRLs”) (out of which four are located outside India), which are equipped to conduct routine, semispecialized and few specialized tests; (iii) 56 satellite laboratories (out of which one is located outside India), which are equipped to conduct routine and semi-specialized tests; and (iv) 44 express laboratories (out of which five are located outside India), which are equipped to conduct routine tests. MHL’s service network caters to individual patients as well as institutional customers. It services individual patients through 1,631 patient touch points (out of which 26 are located outside India), as of December 31, 2018, including 256 patient service centers owned by it (“Owned PSCs”) and 1,375 third party patient service centers (“Third Party PSCs”). MHL service its institutional customers through approximately 9,552 institutional touch points, as of December 31, 2018, including (i) approximately 9,000 pick-up points; and (ii) 552 assisted referral centers (“ARCs”) (out of which seven are located outside India), which are its exclusive third party referral centers.

 

Objects of Issue:

The objects of the Offer are to achieve the benefits of listing the Equity Shares on the Stock Exchanges and for the Offer for Sale. Further, MHL expects that listing of the Equity Shares will enhance its visibility and brand image and provide liquidity to the Shareholders. The listing will also provide a public market for the Equity Shares in India. MHL will not receive any proceeds from the Offer and all the proceeds will be received by the Selling Shareholders, in proportion to the Offered Shares sold by the respective Selling Shareholders as part of the Offer.

 

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