Cipla, Alkem vie for Rs 4,000 crore stake in India's largest stent manufacturer: Report
Mumbai: Pharmaceutical giants Cipla and Alkem Laboratories are in the final stages of a bidding war to acquire a controlling stake in Sahajanand Medical Technologies (SMT), India's leading cardiac stent manufacturer, reported The Economic Times citing sources.
The deal, valued between Rs 3,500 and Rs 4,000 crore, is expected to conclude with binding offers next week.
This comes after private equity firms KKR, TPG Capital, and Apax Partners withdrew from the competition.
SMT's promoters, the Kotadia family, plan to retain a minority stake of 15-20% post-transaction. Other shareholders are also expected to divest their holdings.
Currently, Morgan Stanley Private Equity Asia and Samara Capital collectively own 49% of SMT, while Kotak Pre-IPO Opportunities Fund holds a 6% stake. The Kotadia family controls the remaining 45%.
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As per sources, if the stake sale fails to meet expectations, SMT is exploring a domestic public listing. Insiders suggest an IPO could value the company higher.
SMT's IPO plans were initially on hold in 2022 when it filed for a Rs 1,500 crore offering with the Securities and Exchange Board of India (SEBI).
Founded in 1993, SMT holds a 31% share of the drug-eluting stent (DES) market in India and has a growing presence in Europe. In FY24, the company reported revenue of Rs 900 crore and EBITDA of approximately Rs 140 crore. Shareholders are seeking a valuation of 25 times the company's earnings.
According to a recent media report in Business Standard, India's coronary stent market, valued at Rs1,300 crore, is expanding at a CAGR of 12%. Global giants Abbott Vascular, Boston Scientific, and Medtronic dominate the market with a combined 60% share. Indian manufacturers, including SMT, Translumina, and Meril Life Sciences, together control around 18-20% of the market.
