Entero Healthcare Solutions files draft papers with Sebi to introduce IPO

Healthcare products distributor Entero Healthcare Solutions has filed preliminary papers with capital markets regulator Sebi to mop-up funds through an Initial Public Offering (IPO).

The IPO comprises a fresh issue of equity shares worth up to Rs 1,000 crore and an Offer For Sale (OFS) component of up to 85.57 lakh equity shares, according to the Draft Red Herring Prospectus (DRHP), which was filed on Wednesday.

According to investment banking sources, the IPO is expected to be worth Rs 1,000 crore.

Those selling shares in OFS are promoters Prabhat Agrawal, Prem Sethi, and OrbiMed Asia III Mauritius Ltd, and other shareholders Chethan M P, Deepesh T Gala, Hemant Jose Barros, Hemant Jaggi, K R V S Varaprasad, K E Prakash and Lavu Sahadev.

The company may also consider a pre-IPO placement aggregating up to Rs 200 crore, and if such a placement is completed, the size of the fresh issue will be reduced.

Net proceeds from the fresh issue to the tune of Rs 123.67 crore will be used towards repayment/prepayment, in full or part, of certain borrowings availed by the company and its subsidiaries.

Also, the company plans to infuse Rs 600 crore towards funding the long-term working capital requirements of the company.

It will also use proceeds from the fresh issue towards pursuing inorganic growth initiatives through acquisitions and general corporate purposes.

Entero Healthcare Solutions was founded in 2018 by Prabhat Agarwal and Prem Sethi. The company claims to be among the top three healthcare products distributors in India in terms of revenue in FY22. It reported an operating income of Rs 2,522 crore in FY22.

It helps healthcare product manufacturers by providing them with reach and accessibility to pharmacies, hospitals, and clinics.

ICICI Securities Ltd, DAM Capital Advisors Ltd, Jefferies India Private Ltd, JM Financial Ltd and SBI Capital Markets Ltd are the book-running lead managers to the offer.

The equity shares of the company are proposed to be listed on the BSE and the NSE.