Entero Healthcare Solutions Ltd. (Entero), a distributor of healthcare products, is seeking to generate ₹1,000 crore through a new issue and the offering of 85 lakh shares through an Offer for Sale (OFS) by a selling shareholder as part of its initial public offering (IPO). The company aims to enhance its organic growth by acquiring regional and local distributors that possess robust branding, market standing, and growth prospects in areas where it currently lacks a presence or aims to strengthen its market share, according to MD & CEO Prabhat Agrawal.
"Since our establishment in 2018, we have successfully acquired 32 entities within the healthcare products distribution industry. Our intention is to replicate the achievements we've experienced in key operational cities like Bengaluru, Mumbai, Delhi National Capital Region, Cochin, and Vizag through these acquisitions", stated the CEO. A Crisil report predicts market consolidation in India's pharmaceutical distribution market. Out of the ₹1,000 crore, Rs. 124 crore is allocated for debt repayment by the company and its subsidiaries, ₹600 crore for meeting long-term working capital requirements, and the remaining amount for general corporate purposes. As part of its strategic approach, Entero aims to expand its customer base by adding new pharmacies, hospitals, and clinics in both existing and new territories, according to the CEO.
"We aim to boost sales by leveraging our current distribution network, capitalizing on the limited reach of scaled-up and efficient healthcare product distribution platforms, and fortifying our market position", added Mr. Agrawal. Regarding the planned acquisitions, he mentioned, "When assessing potential acquisition targets, we consider various factors including the target company's market size, customer base, catchment area, supplier relationships, product portfolio, alignment with our existing network, historical financial performance, and future growth opportunities". In terms of revenue for the fiscal year 2022, the company ranks among the top three healthcare product distributors in India, reporting an operating income of ₹2,522.07 crore in FY22 and total income of ₹3,306 crore in FY23 (consolidated), with an EBITDA of ₹64 crore in FY23.