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Stent maker SMT set for ₹2,000 crore IPO; draft filing next month, bankers onboard
MUMBAI
:
Sahajanand Medical Technologies (SMT), a leading domestic manufacturer of cardiac stents, is set to file its draft papers with market regulator Sebi next month for a planned ₹1,500-2,000 crore initial public offering (IPO), two people aware of the development told Mint.
The IPO is being led by Motilal Oswal, Avendus, Nuvama and HSBC, and will see existing investors such as Samara Capital, Kotak, and Morgan Stanley offloading their stakes, one of the people cited above said.
'The issue will have only an offer-for-sale component and the draft papers are expected to be filed in July with a potential listing by the end of this year," the second person said. This means that the IPO will not raise any fresh capital for SMT and all proceeds from the share sale will go only to the selling shareholders.
While Avendus, HSBC and SMT declined to comment, others did not immediately respond to Mint's requests.
The first attempt
This would mark SMT's second attempt to go public after it shelved a 2021 IPO plan.
SMT first filed for an IPO in September 2021 with plans to raise around ₹1,500 crore, comprising both an OFS and a primary issue. The funds were earmarked for repaying debt and supporting the working capital needs of its foreign subsidiary, Vascular Innovations.
The IPO was later put on hold. Instead, SMT raised around ₹170 crore from Kotak's Pre-IPO Opportunities Fund in 2023, which valued the company at approximately ₹3,000 crore.
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Financials and growth
Since then, SMT has posted notable growth. It recorded revenue of ₹909 crore in FY24, up from ₹588 crore in FY21. Losses narrowed to ₹7.4 crore in FY24 from ₹72.38 crore in FY21. The company also posted a profit of ₹11.9 crore in FY23 on revenue of ₹801 crore, according to data from Tracxn.
'With better financials, the company's valuation has also improved, and the selling shareholders are expected to make big gains from the IPO if all goes as planned," one of the people added.
SMT was incorporated in 1998 by Dhirajlal Kotadia and family. It develops invasive cardiovascular devices such as coronary, structural heart and closure occluder products. The company has made several acquisitions including Imex SC, Zarek and Vascular Concepts Ltd, which expanded its distribution network and product portfolio.
The company recently reshuffled its leadership when it appointed Bhargav Kotadia, part of the founding family, as the chief executive office, earlier this year, replacing Ganesh Sabat. Other appointments include Jose Calle Gordo as the chairman, while Dhirajlal Kotadia will transition to chairman emeritus and continue to provide strategic guidance, according to a company release in February.
As of July 2024, Samara Capital Markets Holding Ltd and NHPEA Sparks Holdings BV—a Morgan Stanley subsidiary—held 31.4% and 16.2% stakes, respectively, as per a Crisil report. Kotak's pre-IPO fund held another 6%, while the rest was owned by promoters.
SMT competes with global players like Abbott, Medtronic and Meril, as well as domestic rivals such as Healthium Medtech and Translumina Therapeutics. It holds around 25-30% market share in India's drug-eluting stent (DES) segment.
Crisil noted SMT's wide distribution, better collections and market presence but flagged concerns around its large working capital needs, R&D-linked volatility in margins, and regulatory exposure.
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Sector outlook
India's cardiovascular device market, valued at $200 million in 2023, is expected to grow at a compounded annual growth rate (CAGR) of 14-15% over the next decade, Avendus said in a report.
Regulatory price caps and broader inclusion of stent implants under government schemes have helped increase adoption. Domestic players' market share has risen from 35% to 60%, as global companies adjusted to lower pricing while Indian firms leveraged cost-effective manufacturing.
Avendus also highlighted rising insurance coverage, affordability, and an expanding patient base as key growth drivers.
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