Dr Lal PathLabs gets Sebi nod for IPO

Leading diagnostic chain Dr Lal PathLabs has received market regulator Sebi's approval to raise funds through an initial public offering (IPO). The company filed its Draft Red Herring Prospectus (DRHP) with Sebi on September 14 for the IPO, wherein the promoters and other existing shareholders will collectively sell 11.6 million shares of the company amounting to 14.1 per cent stake.

The Securities and Exchange Board of India (Sebi) has cleared the proposed initial share sale and gave its final observations on the IPO on November 3. The total amount of funds to be raised through the public offer would depend on the offer price to be decided later. Those participating in the share sale include main promoter Arvind Lal, as also other investors such as Wagner Ltd, Westbridge Crossover Fund and Sanjeevini Investment Holdings.

As per the DRHP filed with Sebi, the IPO would be made through an offer for sale and the proceeds would be remitted to the respective promoters and other investors and therefore the company will not receive any proceeds from the offer.

Kotak Mahindra Capital and Citigroup Global Markets India are the book running lead managers for the IPO.

The company said it is well-positioned to leverage upon one of the fastest-growing segments of the Indian healthcare industry.

Its total revenue rose to Rs 640 crore in the fiscal ended March 31, 2015, from Rs 544 crore in the previous year, while profit after tax rose to nearly Rs 88 crore from Rs 74 crore during the same period.

Since the beginning of 2015, as many as 39 companies filed draft documents with Sebi to float IPOs. In the same period, the market watchdog gave approval to 30 firms to launch their initial share sale plans, some of which were pending from previous year.

So far this year, 18 companies have launched their IPOs and have collectively raised about nearly Rs 11,000 crore, making it the best period in four years in terms of fund raising through initial share-sale programmes.

In comparison, six IPOs had hit the market in the entire 2014 and together garnered just Rs 1,261 crore, while three firms had launched their public issues in 2013 to mobilise Rs 1,284 crore.