India’s capital market regulator Securities and Exchange Board of India (SEBI) has approved IPO plans of Thyrocare Technologies and Ujjivan Financial Services. In a statement on its website, the regulator said it issued observations to the IPO aspirants on 24 and 25 February, respectively. Both companies had filed their draft IPO prospectus on 31 December 2015.
Gurgaon-based diagnostics firm Thyrocare had trouble securing regulatory approvals after certain questionable transactions in the past. The company still managed to get all the clearances in just 55 days, marking the fastest approvals this year with Nihilent Technologies. Thyrocare ran into regulatory troubles as its CEO A Velumani issued shares to more than 49 people several transactions in 2005. Offers made to more than 49 people are deemed public issues and requires prior regulatory approvals, according to the Companies Act (1956).
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The INR400 crore IPO will be completely an Offer For Sale (OFS) from private equity investors CX Partners and the firm’s promoters. Through its Agalia investment vehicle, CX Partners holds 21% stake in Thyrocare while Norwest Venture Partners (NVP) and Samara Capital own 9.4% and 2% equity stake respectively. Among the three PE investors, only CX Partners will be participating in the IPO and plans to sell 1.02 crore shares out of the 1.12 crore shares it holds.
Thyrocare bills itself as the world’s largest thyroid testing laboratory and competes with Dr Lal PathLabs, Metropolis Healthcare, SRL Diagnostics and The Apollo Clinic.
Ujjivan Financial Services
Bengaluru-based microfinance lender Ujjivan also received SEBI approval for its IPO which was originally planning to raise INR1,500 crore through the IPO. The lender, which last year received a small finance bank license from the Reserve Bank of India (RBI), raised nearly INR300 crore in a pre-IPO round earlier this year. Accordingly, the IPO is now expected to be reduced to INR1,200 crore. Unlike Thyrocare, Ujjivan IPO will be a mix of fresh issue of shares as well as an OFS.
Ujjivan’s investors include Sequoia Capital, CX Partners, International Finance Corporation (IFC) and UK’s development finance institution CDC. CDC is the biggest shareholder in Ujjivan with 12.69%, while IFC and CX Partners own 11.84% and 10.69%, respectively. Early this year, the company had raised INR6 billion from its investors. As on 31 March 2015, 88.69% of Ujjivan Financial Services’ equity was with foreign shareholders. The lender has to bring it down to 49% to comply with RBI’s rules for becoming a small finance bank. The IPO is meant to raise funds and give foreign investors with an opportunity to sell their stakes.
For FY2014-15, Ujjivan’s net profit rose 38% from INR55 crore to INR75 crore and it disbursed loans worth INR432.8 crore with repayment rate of around 99.8%.