Thyrocare IPO : Why you should invest ?

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Industry Background :

The Indian Diagnostics Industry has shown remarkable growth in last few years. As of 2014-15, Indian diagnostic Industry currently stands at Rs. 377 billion and the revenue share of the ‘wellness’ segment has shown a prominent increase. In fiscal year (FY) 2015, ‘wellness’ sector offered 51% indicating a 10% increase as compared to FY 2013. Apart from that, it is estimated, till the end of fiscal year 2017-2018, per capita healthcare expenditure will be Rs. 5,194-5,481 indicating a growth of nearly 10-12%. Growing awareness, recognition of this substantial need & interest in healthcare, are the possible reasons behind the rising demand for diagnostic services. It is also estimated that the Indian diagnostic industry will grow at CAGR of about 16-18% in next 3 years, with ‘wellness’ and ‘preventive’ segment estimated to grow at 23-25%.

Company Information : 

Thyrocare Technologies is one of the well-known name in the field of diagnostic & preventive healthcare. This nationwide networked laboratory has a significant presence in more than 2000 cities/towns pan-India as well as internationally. This was achieved due to promising network of 1,041 authorised service providers across India. Thyrocare has a Centralised Processing Laboratory (CPL) in Navi-Mumbai, which conducts above 2 lakh investigations per day. It’s test profiles include 17 profiles of tests promoted under “Aarogyam” brand name. Apart from diagnostic and preventive healthcare sector, they also added cancer scanning and water testing to their business verticals. For efficient cancer monitoring “Nuclear Healthcare Limited” has few molecular imaging centres across New Delhi, Navi Mumbai and Hyderabad. The brand “Whaters” launched in 2015, offers water analysis services to corporate offices, hotels, hospitals, educational institutions and housing societies..

Thyrocare IPO Details :

After successful listing of Dr. Lal Path Labs, Thyrocare is the second diagnostic company to go public with issue of upto 10,744,708 equity shares worth Rs. 480 crore.The firm has priced the offer at a band of Rs. 420-446 per share. The subscription for the Thyrocare IPO starts on 27 April and will go on till 29th April and equity shares will be listed on BSE and NSE listings on 9th May. Shares worth Rs 240 crores (50%) will be reserved only for qualified institutional buyers (QIBs), and 15% will be reserved for the non-institutional investors. JM Financial, Edelweiss Financial Services Ltd. and ICICI Securities are the investment bankers for the issue.

The noticeable fact is, CX Partners who is the second largest shareholder in the company currently holds a stake of around 21% has offered to sell nearly 90% of its holdings. Other private equity investors in Thyrocare such as Norwest Venture Partners (9.43%) and Samara Capital (2%) will not be exiting through the IPO. Minimum application is to be made for 33 shares and in multiples thereafter.

Why you should invest?

Here are top 8 reasons why you should be subscribing to this issue :

  1. The growth in capital efficiencies of diagnostic and preventive care testing business.
  2. Totally debt-free company.
  3. Nationwide networked collection centres, well-connected by logistic capabilities and strong IT backup.
  4. Profiles of specialized tests with clear focus on ‘wellness’ and ‘preventive’ healthcare.
  5. Attractive ROE and ROCE expected with this business model.
  6. Offer price of it’s peer company (Dr. Lal Path labs IPO) which showed remarkable increase post listing
  7. Highly experienced leadership and management team.
  8. Thyrocare technologies has shown a consistent financial performance and growth year-over-year.

For more details about company you can visit : http://www.thyrocare.com/