Entero Healthcare Solutions Files IPO Prospectus with SEBI

Entero Healthcare Solutions, a healthcare products distributor supported by OrbiMed, took a significant step by submitting its draft red herring prospectus to the capital markets regulator SEBI on September 13. Here are the key details:

The company’s initial public offering (IPO) consists of a fresh issuance of shares valued at Rs 1,000 crore by the company itself. Additionally, there is an offer-for-sale (OFS) of 85.57 lakh equity shares, which will be divested by 19 selling shareholders, including promoters Prabhat Agrawal, OrbiMed Asia III Mauritius, and Prem Sethi.

OrbiMed Asia III Mauritius, a corporate promoter owned by the US-based healthcare-focused investment firm OrbiMed, holds a significant 58.70 percent shareholding in the company. Meanwhile, individual promoters Prabhat Agrawal and Prem Sethi own 11.38 percent and 6.46 percent shares in the company, respectively.

The second-largest shareholder in Entero Healthcare Solutions is Prasid Uno Family Trust, represented by trustees Surbhi Singh and Universal Trustee, holding a 20.04 percent stake.

The Mumbai-based company is also considering raising Rs 200 crore through private placement, preferential allotment, or a rights issue before finalizing the red herring prospectus with the Registrar of Companies (ROC).

Proceeds from the fresh issue will primarily be used to repay debts amounting to Rs 123.7 crore and fulfill long-term working capital requirements of Rs 600 crore. Any remaining funds will be allocated towards inorganic growth strategies through acquisitions and general corporate purposes.

Established in 2018 by Prabhat Agrawal and Prem Sethi, Entero Healthcare claims a spot among the top three healthcare products distributors in India, based on its FY22 revenue. In FY23, the company reported an operating income of Rs 2,522.07 crore.

Entero Healthcare operates as a pharmaceutical and medical device distributor, serving a diverse customer base comprising retail pharmacies and hospitals. The company boasts a nationwide network of 73 warehouses and a robust technology infrastructure. Over the course of FY23, it catered to more than 81,400 retail customers and over 3,400 hospital customers, marking significant growth compared to FY22 when it served 64,200 retail customers and 2,500 hospital customers.

While Entero Healthcare has reported losses in previous fiscal years, it showed promising signs in FY23, narrowing its net loss to Rs 11.1 crore from Rs 29.44 crore. Additionally, its revenue demonstrated robust growth, surging 31 percent year-on-year to reach Rs 3,300 crore during FY23.

The IPO’s merchant bankers include ICICI Securities, DAM Capital Advisors, Jefferies India, JM Financial, and SBI Capital Markets.