Sahajanand Medical Files for Rs.1,500 Crore IPO

Sahajanand Medical Technologies has filed the draft red herring prospectus (DRHP) with SEBI for its proposed Rs.1,500 crore IPO. The company is into the design and manufacture of vascular devices, with specialization in stents. Sahajanand already has strong institutional PE backing with investments from Samara Capital and Morgan Stanley PE Fund.

The Rs.1,500 crore IPO will comprise of a fresh issue of Rs.410 crore and an offer for sale of Rs.1,090 crore. While the OFS will be used to give partial exit to the promoters and to the early investors, the fresh issue component will be predominantly used by the company to reduce its debt and deleverage its balance sheet and also for working capital purposes.

Currently, the company is predominantly PE Fund owned. While Morgan Stanley PE Fund has a 18.44% stake, Samara Capital has a 36.59% stake in Sahajanand Medical Technologies. The company is based out of Surat in Gujarat and is a leader in drug eluting stents (DES). In the year FY21, it had a 31% share of the DES market, making it the undisputed niche leader.

Cardio vascular diseases are striking people more frequently and also striking them  early. Hence it is critical that people are able to lead a normal life despite cardio vascular problems. The vascular devices market is expected to grow at 8.6% between 2021 and 2026 even as the incidence of cardio vascular afflictions have doubled globally in last 30 years.

The COVID pandemic has resulted in greater health consciousness and the vascular devices market is also likely to benefit from this trend. The global market size of cardio vascular devices is close to $26 billion and this is likely to see steady growth in the coming years. That will also open up a huge global opportunity for the stent manufacturer.

The Sahajanand Medical IPO will be managed by Axis Bank, BOFA Securities, Edelweiss and UBS. This marks the second IPO filing by a medical devices manufacturer. The first such company to file DRHP was Healthium Medtech, which is largely into surgical sutures and medical consumables.

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