 "Cipla, Alkem eye Rs 4,000 crore stake in India's largest stent manufacturer")
Cipla and Alkem Laboratories have emerged as the leading contenders to acquire a controlling stake in Mumbai-based Sahajanand Medical Technologies (SMT), India’s largest cardiac stent manufacturer. This comes after private equity giants KKR, TPG Capital, and Apax Partners withdrew from the race, having initially shown interest, reported The Economic Times citing sources.
The deal, expected to value SMT between Rs 3,500 and Rs 4,000 crore, is anticipated to see binding offers submitted by next week. Sources told The Economic Times that SMT’s promoters, the Kotadia family, are planning to retain a minority stake in the company, likely holding onto 15-20 per cent post-transaction. Other shareholders are also expected to divest their holdings in this high-stakes deal.
Currently, Morgan Stanley Private Equity Asia and Samara Capital collectively own 49 per cent of SMT, while Kotak Pre-IPO Opportunities Fund holds a 6 per cent stake. The Kotadia family controls the remaining 45 per cent.
In parallel to this potential sale, the medical device company is reportedly exploring a public listing on the domestic market, should the stake sale fail to meet shareholder expectations. Insiders suggest an initial public offering (IPO) could yield a higher valuation for the company.
SMT’s IPO plans on hold since 2022
The medical device company initially filed for a Rs 1,500 crore IPO with the Securities and Exchange Board of India (Sebi) in 2022 but paused those plans. Established in 1993 by Dhirajlal Kotadia, SMT currently holds a 31 per cent share of the drug-eluting stent (DES) market in India and has been expanding its presence in Europe. In FY24, the company reported Rs 900 crore in revenue, alongside earnings before interest, tax, depreciation and amortisation (Ebitda) of around Rs 140 crore. Shareholders are reportedly seeking valuation that is 25 times the company’s earnings.
Cardiac stent market sees strong growth
India’s coronary stent market, valued at Rs 1,300 crore, is expanding at a compound annual growth rate (CAGR) of 12 per cent. Global giants such as Abbott Vascular, Boston Scientific, and Medtronic dominate, holding a combined 60 per cent share of the domestic market. Indian manufacturers, including SMT, Translumina, and Meril Life Sciences, together control around 18-20 per cent of the market.
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With Cipla and Alkem leading the charge for SMT’s acquisition, this deal could significantly reshape the competitive landscape of India’s growing cardiac stent market.