HSBC Private Equity, ePlanet to shed Trivitron stake

HSBC Private Equity and ePlanet Capital are planning to sell their stake in Chennai-based medical diagnostics firm Trivitron Healthcare.

"Since their investment cycle has matured, both PE firms are exploring a partial exit from the company," GSK Velu, MD, Trivitron told ET. Trivitron Healthcare has appointed Kotak Investment Bank to scout for a buyer.

Both PE firms had invested close to $11 million in Trivitron Healthcare in 2007, picking up minority stake in the company. Trivitron Healthcare is one of India's largest medical technology company, involved in designing and manufacturing of medical devices.

It posted gross revenue of 500 crore in FY12. The company is looking to raise close to $100 million for investing in its medical technology park in Chennai. It is also planning small size acquisition in this space.

"The emergence of private healthcare centres and investment by the government in primary healthcare are going to be the key growth drivers for medical device companies," said Sujay Shetty, partner healthcare, PWC.

The industry, which is relatively small now, has been growing at 12-15 % every year, and will continue to do in a country like India, where healthcare is getting modernised.

But despite the huge market, the interest among private equity players is still subdued in this space, said Abhishek Sharma, from investment banking firm Mape Advisory.

"Most of the PE firms prefer investing in companies that are on the service side of the business," Sharma says. He said medical device manufacturing space is dominated by big giants such as Johnson & Johnson, GE and Siemens and hence there is very little scope for smaller players to expand.

Source: EconomicTimes