Sahajanand joins the queue of medtech companies eyeing IPO in India

Sahajanand Medical Technologies Ltd, which designs, develops, manufactures and markets vascular devices globally, has filed its documents with the capital markets regulator to float its initial public offering.

Mumbai-headquartered Sahajanand joins Healthium MedTech (formerly Sutures India), which had previously filed a draft red herring prospectus with SEBI for an IPO.

The two companies are prominent players in the medical devices and consumables space and would look to add more diversity in the subsectors for investors looking to bet on healthcare companies.

Notably, both the companies already count private equity investors, who are looking to sell part of their stakes through the respective IPOs.

Sahajanand, which claims a strong market share in the drug eluting stent market in India, is looking at an IPO of about Rs 1,500 crore. Of this, Rs 410 crore will go into the company through a fresh issue of shares and the rest will go to the selling shareholders including two private equity firms.

The company intends to use the money it raises in the IPO to retire debt (Rs 255 crore) and another Rs 40 crore for working capital needs.

Sahajanand Medical's business

The company was founded by Dhirajlal Kotadia in 2001. It claims it has grown from around a fifth of the total to grab close to one-third of the market share in terms of volumes for stents in India.

Citing a report by Frost & Sullivan, the company said it is among the top five companies in terms of market share by sales volume of drug eluting stent in Germany, Netherlands, Italy and Poland as of March 31.

It has a direct and distributor sales presence in more than 69 countries, including direct presence in countries such as Germany, Poland, Spain, France, the UK and Brazil.

Currently, it offers products that are used in interventional cardiology, structural heart therapy and peripheral intervention. Interventional cardiology products include devices used for the treatment of blockages in heart vessels (coronary artery disease), such as coronary stents and catheters.

Structural heart therapy devices such as transcatheter aortic valve implants are used to treat abnormalities in the tissues, walls, and valves of the heart. Peripheral intervention devices such as renal stents are used for treatment of blockages in the blood vessels other than those of the heart.

Sahajanand Medical's financials

The company’s revenue rose from Rs 326 crore in 2018-19 to Rs 588.5 crore for 2020-21. However, its margins have come under pressure. Its operating profit has slid in the recent past due to a rise in legal and professional expenses, sales and marketing expenditure, and finance costs.

Exceptional items such as provisions for GST input tax credit and costs related to a phishing attack pushed the company into the red. It posted a net loss of Rs 86 crore for 2020-21 as against a net profit of Rs 13.6 crore and Rs 33 crore for the previous two years.