Entero Healthcare Solutions Files For Rs 1,000 Cr IPO To Fuel Growth

On September 13 Entero Healthcare Solutions, a healthcare product distributor, took a significant step towards going public.  As per media reports, the company, backed by OrbiMed has filed its draft red herring prospectus with the capital markets regulator Sebi, outlining its intention to raise capital through an initial public offering (IPO).  

In conformity with reports, the IPO consists of a fresh issuance of shares valued at Rs 1,000 crore by the company itself, along with an offer-for-sale (OFS) of 85.57 lakh equity shares by 19 selling shareholders which includes key figures like promoters Prabhat Agrawal, OrbiMed Asia III Mauritius, and Prem Sethi.

In line with reports, OrbiMed Asia III Mauritius holds a significant 58.70 per cent share in the company. Meanwhile, individual promoters Prabhat Agrawal and Prem Sethi possess 11.38 per cent and 6.46 per cent of the shares, respectively. 

Prasid Uno Family Trust, through trustees Surbhi Singh and Universal Trustee, is the second-largest shareholder, with a notable 20.04 per cent stake. 

 As per reports, Entero Healthcare Solutions is contemplating raising Rs 200 crore through private placement, preferential allotment, or rights issues before finalising the red herring prospectus. The primary use of the net fresh issue proceeds as per reports will be to repay debts totalling Rs 123.7 crore and address long-term working capital needs amounting to Rs 600 crore. The remaining funds will be earmarked for inorganic growth initiatives through acquisitions and general corporate purposes. 

Founded in 2018 by Prabhat Agrawal and Prem Sethi, Entero Healthcare positions itself among the top three healthcare product distributors in India in terms of revenue for FY22. The company reported an operating income of Rs 2,522.07 crore in FY23, showing robust revenue growth of 31 per cent year-on-year to reach Rs 3,300 crore.

 According to reports, despite its impressive revenue growth, Entero Healthcare has reported losses. In FY23, the company incurred a net loss of Rs 11.1 crore which is an improvement from a loss of Rs 29.44 crore in the previous year. The IPO is expected to provide the necessary capital to support the company’s growth plans and manage debt obligations. 

The IPO is being managed by leading merchant bankers, including ICICI Securities, DAM Capital Advisors, Jefferies India, JM Financial, and SBI Capital Markets. Entero Healthcare Solutions operates as a pharmaceutical and medical device distributor, serving a customer base of retail pharmacies and hospitals. 

The company boasts a vast pan-India network of 73 warehouses and has established supply relationships with over 1,900 healthcare product manufacturers, providing access to more than 64,500 product stock-keeping units (SKUs).