Entero Healthcare Solutions Ltd, which counts healthcare-focussed private equity firm OrbiMed as an investor, made a weak stock market debut Friday with its shares listing at a discount to its initial public offering price and then falling further.
Shares of the healthcare products distribution company began trading on the NSE at Rs 1,228.70, down 2.3% from the issue price of Rs 1,258 apiece. The shares touched a low of Rs 1,201 in the first few minutes of trade. The company currently commands a market valuation of around Rs 5,245 crore.
The tepid listing comes after the company’s IPO failed to enthuse public market investors. Entero’s IPO was subscribed only 1.5 times, with non-institutional investors such as corporate houses and high-net-worth individuals largely staying away.
The IPO raised Rs 1,600 crore ($193 million). This comprised a fresh issue of shares to raise Rs 1,000 crore and a Rs 600-crore offer for sale by OrbiMed and other shareholders. OrbiMed alone sold shares worth Rs 480 crore.
OrbiMed, which sealed one new deal last year after adding two new companies to its India portfolio in 2022, had virtually incubated Entero and helped co-create the company from scratch six years ago. It sold a third of its 57.27% stake in Entero via the IPO, likely generating high returns on its investment, VCCircle reported previously.
Entero was founded in 2018 by Prabhat Agrawal and Prem Sethi to create an organised, pan-India, technology-driven and integrated healthcare products distribution platform. It brought OrbiMed on board as an early backer. The PE firm invested around Rs 510 crore via multiple tranches in Entero starting in 2018. Bulk of the investment was made between 2020 and 2022.
The company says it is among the top three healthcare products distributors in India in terms of revenue. It says it hit a milestone of Rs 2,500 crore in operating income within four years of operations.
As of 31 March 2023, Entero had 73 warehouses located across the country besides last-mile delivery infrastructure and relationships with pharmacies, hospitals and clinics to enable healthcare product manufacturers to make their products available to a wide range of customers. The company’s revenue during the six months ended September 2023 was Rs 1,895 crore with net profit of Rs 11.6 crore.