Medical Equipment Firm Healthium Medtech Set to Launch IPO

Medical products and equipment maker Healthium Medtech has joined the rush of companies going public as it filed a draft red herring prospectus with India’s capital markets regulator to raise funds through an initial public offering.

Healthium’s IPO comprises a fresh issue of shares to raise Rs 390 crore and an offer for sale of 3.91 crore shares by selling shareholders. Promoter Quinag Acquisition will sell up to 3.9 crore shares while Mahadevan Narayanamoni will divest up to 1 lakh shares.

Quinag, which is backed by funds advised by private equity firm Apax Partners, holds a 99.79% stake in Healthium. It had acquired Healthium in 2018 from the company’s founders, TPG Growth and other shareholders.

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Healthium Medtech IPO Details

Healthium Medtech plans to use about Rs 180 crore out of the net proceeds from the fresh issue to invest in subsidiaries Sironix Medical Technologies, Clinisupplies and Quality Needles. 

It also plans to use Rs 50.09 crore to repay its debts, and Rs 58 crore for acquisitions and other strategic initiatives. Rest of the money will be used for general corporate purposes.

Financial performance of Healthium Medtech

Healthium’s revenue from operations has clocked a compound annual growth rate of 10.52% between 2018-19 and 2020-21. It increased revenue from operations and earnings before interest, tax, depreciation and amortisation (EBITDA) by 11.61% and 61% in 2020-21, despite an economic slowdown and the impact of the Covid-19 pandemic.

The company’s net profit jumped to Rs 85.43 crore in 2020-21 from Rs 36.76 crore in 2019-20 and Rs 13.73 crore the year before.

Healthium Medtech Market share

The company makes products used in surgical, post-surgical and chronic care fields. According to a Frost & Sullivan report, one in five surgeries conducted globally uses a Healthium product as of March 2021. 

The company says that it is the largest independent medical device company and the second-largest company overall in India’s surgical consumables market with a share of 7.91% in value terms.

It is also the largest non-captive maker of surgical needles with a 22.3% share in overall volume sales globally and a 45.41% share of the non-captive market.

The company says the global market for products in its focus areas is likely to grow at an annualised pace of about 5% between 2021 and 2025, and is estimated to be $28.75 billion in 2025. 

The size of the market for surgical consumables and arthroscopy products in India is estimated to be $455.84 million in 2021. This market is projected to grow at a CAGR of 9.6% between 2021 and 2025, Healthium says.