Trivitron mulls Rs 200 crore IPO

Company to use the proceeds to fund phase II expansion.

Chennai-based medical technology products manufacturer, Trivitron Group of Companies, is planning to raise Rs 200 crore through an initial public offering (IPO). The company would use the proceeds to fund its Rs 500-crore phase II expansion plan, which is scheduled to commence by 2011-12.

“The remaining Rs 300 crore would be raised from private equity investors, bank debts and from joint venture partners,” said GSK Velu, managing director, Trivitron Group of Companies, told Business Standard.

The company has already earmarked Rs 250 crore as part of the phase I expansion over the next two years, for setting up a medical technology park at the Sipcot Industrial Park in Sriperumbudur and for its inorganic growth.

Of the Rs 250 crore, the joint venture partners will invest Rs 100 crore while Rs 150 crore would be met through internal accruals, private equity and bank debts.

“The proposed investments would help the company capture 10 per cent of the domestic medical technology products market, which is estimated to be around $3 billion (around Rs 15,000 crore), over the next 3 years,” said Velu.

Speaking about the Sipcot park, which is coming up on 23 acre, Velu said the company had already signed three joint venture agreements with Spain-based Biosystems to manufacture IVD reagents, UK-based Brandon Medical to manufacture cold shadowless lights for operation theatres and with Japan-based Aloka Company Ltd for setting up manufacturing facilities inside the park. Two more deals are expected to be finalised in the next 2-3 months.

“The products manufactured here would cater to both domestic and international markets including South Asia, West Asia and Africa,” he said.

With regard to the inorganic growth, Velu said Trivitron had identified 10 companies in the range of Rs 5-10 crore. Trivitron had recently acquired Pune-based X-ray machine manufacturer Vision, which has two manufacturing facilities in Pune.

The company is alsoin talks with four domestic ECG machine manufacturers. While Trivitron will own and design, the product and will be manufactured by the partner.