Fortis Group companies—diagnostic chain SRL Ranbaxy and retail chain Fortis Healthworld—are considering a strategic alliance to offload minority stakes to private equity (PE) players to part fund their respective expansion plans.
A source told ET, “SRL Ranbaxy is in advanced talks with a few PE firms as part of the pre-IPO sale. The company is looking at forging a strategic alliance with Fortis Healthworld, wherein the latter would also divest some of its stake.
There is a possibility that a PE fund may get to pick up stakes in both the companies. Officials of both Fortis Healthworld and SRL Ranbaxy—separate companies of the Fortis Group — were not available for comment.
According to industry sources, the diagnostic and retail chain companies share a lot of synergy being in the same sector. As such, SRL Ranbaxy can leverage its brand value and support its pharmacy retail partner, which is a relatively new model in India.
SRL Ranbaxy is planning to float an IPO to raise around Rs 200-250 crore by the end of the year. It plans to offload around 10-20% stake to PE firms as a pre-IPO sale. The company would use the fund from the issue to add about 35 laboratories across India and scale its network to over 100 laboratories in the next few years. At present, it has 750 collection centres and 40 laboratories.
Fortis Healthworld has so far not finalised its plans on going public. However, the retail venture has also earmarked an investment of about Rs 800 crore by 2012 to set up around 1000 stores, covering 400 Indian cities.
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