SRL withdraws IPO prospectus


Bangalore: Super Religare Laboratories (SRL) has withdrawn its initial public offering (IPO) prospectus, after an order from the Securities and Exchange Board of India (Sebi) to do so, since the shareholding pattern of the diagnostic chain had changed, report Mehul Shah and Reghu Balakrishnan of Business Standard. SRL, founded by billionaire brothers Malvinder and Shivinder Singh, had filed its draft red herring prospectus (DRHP) with SEBI on February 15. In April, Fortis Healthcare, also controlled by the Singh brothers, received in-principle approval to acquire a strategic stake in SRL. On May 12, Fortis completed the acquisition of 74.59 percent stake from the SRL promoters for Rs 803 crore. This has made Fortis the new promoter of SRL instead of the Singh brothers. SRL also did pre-IPO placements with two private equity (PE) companies after filing its DRHP in February. In April, Avigo Capital Partners picked up 9.27 percent in SRL for about Rs 100 crore. Another PE firm, Sabre Partners, invested Rs 50 crore early this month to acquire about four percent. Logos Holding, Prime Trust and Religare Group companies hold the remaining stake. The regulator has asked SRL to incorporate the latest changes in its shareholding pattern and file a new DRHP, according to an official familiar with the matter. Nomura Financial Advisory & Securities, lead manager of the SRL issue, accordingly withdrew the earlier DRHP, via a letter dated May 9, the Sebi website showed. Kotak Mahindra Capital and Religare Capital Markets are the other two book running lead managers for the issue. "As a result of Fortis Healthcare becoming controlling shareholder of SRL, the company has withdrawn its current DRHP application for making necessary revisions and changes in the relevant parts of the DRHP to reflect the revised ownership pattern," said Sanjeev Chaudhry, CEO, SRL. "The company proposes to re-submit the revised DRHP application with an update of its financial results for the financial year ended March 31 in the next four to six weeks." In the DRHP filed in February, the company wanted to come out with an IPO of 28 million shares, which would have amounted to 35 percent of the fully-diluted, post-issue, paid-up capital. At that time, SRL had said it was considering pre-IPO private placement of eight million shares, which would reduce the offering to 25 percent of the post-issue paid-up capital. By the latest Fortis deal, SRL should be able to raise at least Rs 270 crore from its IPO. SRL is likely to be the first diagnostic chain to get listed on Indian bourses. Last year, it had acquired Piramal Diagnostic Services for Rs 600 crore, to become the largest diagnostic company in the Rs 9,000 crore per year Indian diagnostic services market. As of December 31, 2010, SRL and Piramal Diagnostic were running eight reference laboratories, 181 network laboratories, 15 wellness centers and 888 collection centers. The entity performs a little over 33,000 tests per day and catered to about 4.2 million customers during the nine months ended December 31, 2010.