Healthvista India, which provides home healthcare services under the Portea brand, has filed its draft prospectus for an initial public offer. The size of the public issue is expected to be around Rs 900-1,000 crore. Here are some of the key things to know about the company.
THE COMPANY
Founded in 2013, Portea is the leading out-of-hospital healthcare provider in India in terms of revenue and also the number of cities it covered as of December 2021. Further, it had the highest market share of 21 per cent in fiscal 2021.
The company provides a slew of out-of-hospital healthcare services, including primary care, geriatric (elderly) and palliative (end-of-life) care, intensive care unit care, post-operative and post-hospitalisation care, chronic care, mother and baby care and cancer care, all at home. It also distributes specialty pharmaceuticals and provides “point of care” medical equipment for sale and rental.
As of March 31, 2022, the company had 40 offices across India, entered into agreements with 63 hospitals, 80 corporates, eight insurers and 11 insurance TPAs to provide out-of-hospital healthcare services to their patients, employees and insured customers, respectively.
THE BUSINESS POTENTIAL
The healthcare industry in India is expected to grow at a CAGR of 20.5 per cent from 2020 to reach $870 billion by 2027. While 60 per cent of the healthcare requirements in India can be met through out-of-hospital healthcare services, the out-of-hospital healthcare sector in India is expected to grow at a CAGR of 17.5 per cent from $6.03 billion in 2021 to $15.87 billion in 2027, while the organised sector will grow at a 32 per cent CAGR for the same period, according to a report prepared by Frost & Sullivan (India) report, which was commissioned by Portea.
WHY THE IPO?
The company is expected to raise between Rs 900 crore and Rs 1,000 crore through the IPO and plans to use the issue proceeds for funding the working capital requirements of Medybiz Pharma – a material subsidiary of the company. A part of the proceeds will also be used for repaying or prepaying certain debts and for purchasing medical equipment. A portion will also be used for marketing and brand building activities.
THE FINANCIALS
Currently, the company is not making any profits.
For the nine-months ended December 31, 2021, the firm reported a net loss of Rs 34.9 crore. The net loss for the earlier three financial years – FY21, FY20 and FY19 – was pegged at Rs 37.02 crore, Rs 48.01 crore and Rs 71.8 crore, respectively.
The revenue for the nine-months period ended December 31, 2021 was Rs 113.6 crore. The revenue for FY21 and FY20 was Rs 127.6 crore and Rs 150.6 crore, respectively.
PE/VC INVESTORS & THEIR ACQUISITION PRICE
The company is backed by names like Accel India, Qualcomm Asia Pacific, Sabre Partners, International Finance Corporation, Sama Family Trust, Cyperales, Ventureast Trustee and MEMGCDC Ventures among others.
These are also the investors who would offload a part of their shares as part of the IPO. While the company is yet to announce its price band for the public issue, the average cost of acquisition of shares for most of the above-mentioned investors is pegged between Rs 20 and Rs 55.
RISKS
The company’s draft prospectus has listed some of the key risks as follows:
The company is subject to various operational, reputational, medical and legal risks associated with the operations of its healthcare services and, in particular, is exposed to inherent risks of caretaking incidents.
It could be exposed to risks relating to the handling of personal information, including medical data. Further, its business depends on the demand for out-of-hospital healthcare services, which is affected by patient preferences, economic condition, and social factors.
Portea faces competition from hospitals and other healthcare services providers and any adverse effects on the competitive position could result in a decline in its business, revenues, profitability and market share. The company and its subsidiaries have incurred net loss in the past, and may not be able to achieve or maintain profitability in the future, it stated in its draft document.
