Ahead of its proposed initial public offering (IPO),SRL Ranbaxy Ltd, a diagnostics firm owned by the promoters of Ranbaxy Laboratories Ltd, might integrate itself with group drug retailer Fortis HealthWorld Ltd.
The move aims to increase the valuation of the merged entity before it hits the capital market, said a person familiar with the development.
“While Fortis HealthWorld was brought under the Religare brand recently (by changing its name to Religare Wellness Ltd last week), a decision to extend the same to SRL Ranbaxy will be announced soon,” he said, requesting anonymity.
A Religare spokesman, however, said, “Though there are synergies between the two businesses, there are no merger plans as of today.”
SRL, which runs a chain of pathological laboratories, plans to raise Rs200-250 crore through an IPO. It is part of the Religare group that has interests ranging from technology services and business process outsourcing to health care and financial services.
SRL, which has its main laboratories in New Delhi and Mumbai, reaches smaller cities through a franchise network that serves as sample collection centres. By integrating with Fortis HealthWorld, SRL can increase its owned network using the drug retailer’s stores. Fortis and SRL are currently under the same management, as the chief executive of SRL, Sanjeev Choudhary, was given additional charge of the retail firm early this year.
“Wellness retail is now proposed to be under the Religare Wellness brand umbrella. Efforts are also on to seamlessly extend the brand to the travel and aviation business, as well diagnostic business and pathological labs being operated through SRL Ranbaxy,” Religare had said in an emailed statement last week.
Fortis HealthWorld, which runs 43 stores mainly in northern India, announced last week a Rs14 crore buyout of pharmacy retail chain CRS Health, which has a presence in north, south and west India. This deal means Fortis HealthWorld acquires CRS’ 27 retail stores and four warehouses in the country.
“The drug retail company will also sign one, or two more retail chain acquisitions in the south, mainly to expand the chain to about 150 stores in the country this year,” said another person familiar with the development, who declined being named.
“Its (Fortis) current focus is to expand the business base, which will in turn get added up in the combined retail business, including the diagnostics firm. The company may also tie up with a few well-known retail companies such as Reliance Fresh to expand its network in other parts of the country,” he added.
Source: Livemint