Entero Healthcare, with the backing of OrbiMed, has submitted an IPO filing worth 1,000 crore rupees in the healthcare distribution sector

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Entero Healthcare, with the backing of OrbiMed, has submitted an IPO filing worth 1,000 crore rupees in the healthcare distribution sector

Healthcare product distributor Entero Healthcare Solutions, with the backing of OrbiMed, has taken a significant step by submitting its draft red her

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Healthcare product distributor Entero Healthcare Solutions, with the backing of OrbiMed, has taken a significant step by submitting its draft red herring prospectus to SEBI on September 13 for an initial public offering (IPO). This IPO involves a fresh issuance of shares worth 1,000 crore rupees by the company, as well as an offer-for-sale (OFS) of 85.57 lakh equity shares by 19 selling shareholders, including key figures like Prabhat Agrawal, OrbiMed Asia III Mauritius, and Prem Sethi.

OrbiMed Asia III Mauritius, a corporate promoter linked to the US-based healthcare-focused investment firm OrbiMed, holds a substantial 58.70 percent stake in the company. In contrast, individual promoters Prabhat Agrawal and Prem Sethi have ownership stakes of 11.38 percent and 6.46 percent, respectively. The Prasid Uno Family Trust, represented by trustees Surbhi Singh and Universal Trustee, is the second-largest shareholder, possessing a 20.04 percent interest.

Before formally submitting the red herring prospectus to the ROC, the company is considering raising an additional 200 crore rupees through private placement, preferential allotment, or rights issuance.

The primary objective of the funds generated from the fresh issue is to retire debts amounting to 123.7 crore rupees and meet long-term working capital requirements totaling 600 crore rupees. Any remaining capital will be allocated towards strategic inorganic growth endeavors through acquisitions and general corporate purposes.

Established in 2018 by Prabhat Agrawal and Prem Sethi, Entero Healthcare claims to be one of India’s top three healthcare product distributors, as evidenced by its FY22 revenue of 2,522.07 crore rupees. The company specializes in distributing pharmaceuticals and medical devices to a broad customer base comprising retail pharmacies and hospitals. With a nationwide network of 73 warehouses and advanced technology infrastructure, it significantly expanded its reach in FY23 by serving more than 81,400 retail customers and over 3,400 hospital customers, compared to 64,200 retail customers and 2,500 hospital customers in FY22. Additionally, Entero Healthcare maintains supply relationships with over 1,900 healthcare product manufacturers, enabling access to an extensive inventory of over 64,500 product stock-keeping units (SKUs).

Despite robust revenue growth, Entero Healthcare has reported losses in previous fiscal years. In FY23, it managed to narrow its net loss to 11.1 crore rupees from the previous year’s loss of 29.44 crore rupees, while its revenue witnessed a notable 31 percent year-on-year increase, reaching 3,300 crore rupees during FY23.

The IPO is being facilitated by merchant bankers including ICICI Securities, DAM Capital Advisors, Jefferies India, JM Financial, and SBI Capital Markets.

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