PE-backed Dr Lal PathLabs gains on India trading debut

The company sold 11.6 million shares at INR550 apiece, facilitating partial exits for TA Associates and WestBridge Capital, according to a filing. The offering was substantially oversubscribed and Dr. Lal's stock ended its first day of trading at INR824.15.

The promoter sold 4.1 million shares, with TA and WestBridge unloading 5.86 million and 1.47 million, respectively. TA retains a 9.21% stake in the business with WestBridge holding 12.88%.

WestBridge first invested in Dr. Lal in 2005 through its WestBridge Ventures I fund. It later sold part of this stake to TA Associates in 2013, rolling over the rest into its more recent WestBridge Crossover Fund. TA itself had invested in the company in 2010, picking up a 16% stake from Sequoia Capital.

Founded in 1949, Dr. Lal has grown into India's second-largest medical diagnostics chain. The company provides testing services to individual patients, hospitals and other healthcare providers, and corporate clients. In the most recent fiscal year it claimed to have processed 21.8 million samples from nearly 10 million patients nationwide.

Healthcare spending made up 4% of India's gross domestic product in 2013, lower than many other developing countries, according to the World Health Organization. A report by CRISIL attributes this to under-penetration of healthcare services and lower consumer spending on healthcare. Dr. Lal believes demand for diagnostics services is likely to rise, with the industry seeing compound annual growth of 16% over the next three years, to INR600 billion by 2018.

The company's revenue grew from INR5.4 billion for the year ended March 2014, to INR6.4 billion for the year ended March 2015. Over the same period profit increased from INR802.6 million to INR949.9 million.

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• Topics
• Exits
• South Asia
• Healthcare
• TA Associates
• WestBridge Capital Partners
• IPO
• Exit
• India
• healthcare