Warburg bet on this company three years ago. Now Temasek, ADIA are lining up.
Warburg Pincus-backed Micro Life Sciences Pvt. Ltd is in advanced talks to raise capital from Singapore's Temasek Holdings and the UAE's Abu Dhabi Investment Authority (ADIA) ahead of a planned initial public offering (IPO), three people aware of the development said.
'The current funding round is expected to be around $250-300 million," one of the people cited above said. The company is likely to go public over the next 12-18 months, the second person added.
'The (valuation) ask is around ₹65,000 crore, which is more than 40 times its Ebitda," the third person said, adding the company reported an earnings before interest, tax, depreciation and amortization or Ebitda of around ₹1,300 crore in FY25. All three people spoke on the condition of anonymity.
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Temasek, ADIA, and Warburg Pincus declined to comment on Mint's queries, while a response from Micro Life was unavailable until press time.
The Vapi, Gujarat-based Bilakhia family founded Micro Life Sciences in 2006. The company has multiple subsidiaries, with the most prominent being Meril Life Sciences. The Bilakhia group, founded by Gafurbhai Bilakhia, is now managed by his three sons, Yunus Bilakhia, Jakir Bilakhia and Anjum Bilakhia. The company operates in healthcare, investment and real estate through its subsidiaries.
Individually evaluating
'Investment firms are individually evaluating, and bids are likely to go in next month," the third person added.
At a valuation of ₹65,000 crore, Warburg Pincus, which invested $210 million in Micro Life three years ago at a valuation of over $1.8 billion, may be sitting on a fourfold gain in its investment.
'At that value, only a sovereign fund or a state-backed investor can do a deal, given their cost of capital is low," the third person said.
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Meril, a key subsidiary of Micro Life, makes coronary stents, peripheral stents, balloon catheters, and heart valves. Micro Life Sciences reported a total income of ₹3,495 crore in FY24, against ₹2,359 crore in FY23, according to a Care Ratings report dated 8 October, 2024. It reported a profit after tax of ₹333 crore in FY24, against ₹505 crore in FY23. Profit in FY23 included a 'fair value gain of ₹298 crore from the derecognition of JV investment,' Care Ratings said.
'In terms of sales mix, in FY24, Micro earned ~40% of its revenue from cardiac implants (major products: stents, balloon and heart valves), 40% from orthopaedic implants (major products: knee implants, hip implants, and surgical robots) and 10% each from the diagnostic segment and the surgical segment (major products: sutures and mechanical closures)," the note said.
The report added that in some segments, the company saw 'stable to marginally higher sales realization", leading to better gross margins. Micro's gross margins improved to 72.80% in FY24 from 64.64% in FY23 on better product mix.
Arms in 25 countries
The Micro group has subsidiaries in more than 25 countries including Germany, Turkey, the US, Russia, South Africa, Brazil, Bangladesh, Australia, China, and the UK. The company sells its products in over 100 countries directly and through its overseas subsidiaries, with export sales realization being much higher than domestic.
Also read | Haldiram's confirms stake sale to IHC, Alpha Wave Global post Temasek deal
The Indian medtech ecosystem has seen tremendous investor interest in recent years. In 2024, KKR won a bidding war to acquire Healthium from Apax Partners, while Warburg Pincus invested over $300 million in Appaswamy Associates. Morgan Stanley Private Equity Asia invested ₹1,000 crore in Maiva Pharma, an injectables maker.
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