Fertility chain Indira IVF seeks partnerships to expand clinics in India

Company says stakeholder Boston-based TA Associates is not seeking an exit for now

Indira IVF, the Rs 1200-crore fertility clinic chain, will take the partnership route to scale up operations and expand its business in the country.

The Udaipur-based company runs 116 centres and has some 16 per cent share of the IVF market in India, said Dr Kshitiz Murdia, chief executive officer and co-founder of Indira IVF.

More than 50 per cent of the company’s centres are in Tier 2 and Tier 3 cities and towns. “According to WHO estimates, one in six couples suffer from infertility here (India), and so infertility is as much a rural problem as is urban,” he said.

The organised IVF sector, which has 17-18 per cent share of the Rs 6000 crore market, is growing at 15-20 per cent annually. The overall industry, comprising single-doctor clinics and unorganised players, is growing at 12-15 per cent annually.

“We have identified over 600 clinics for partnership, and are already in touch with 70-80 clinics. We hope to close (partnership deals with) 20 clinics this financial year and around 150 clinics in the next five years in geographies where we are not present. This is particularly in Tamil Nadu, Andhra Pradesh, and Kerala to begin with and subsequently the Northeast,” said Dr Murdia.

Indira IVF had an annual turnover of Rs 1205 crore in FY23, reporting an Ebitda margin of 30-35 per cent. Dr Murdia said he plans 20-25 per cent annual growth for Indira IVF. (See chart)

The company’s partnerships follow a revenue-sharing model with clinics that are co-branded. A large fertility facility roughly costs Rs 5-6 crore for setting up; a smaller one costs Rs 85 lakh. Dr Murdia said partnerships leverage the local connection of neighbourhood clinics.

Each IVF (in virto fertilization) cycle costs around Rs 1.7-2 lakh, and another Rs 1-1.5 lakh during the nine-month pregnancy.

Boston-based TA Associates owns a 47 per cent stake in Indira IVF and the company’s promoters hold 53 per cent. In January, Bloomberg reported that TA Associates was looking at monetizing its stake for a valuation of around $ 1bn.

Dr Murdia said that TA Associates is not in a hurry to exit, and can continue for another 7-8 years, hinting that an initial public offering (IPO) to offer an exit is an option. “We have added more than 40 centres since the investment by TA Associates,” said Dr Murdia.

Financial numbers:
 

FY23: Rs 1205 crores

FY22: Rs 928 crores

FY21:  Rs659 crores

FY20: Rs 835 crores

FY19:  Rs 663 crores

CAGR: For FY15 to FY21 is 54%

R&D expenditure of Rs 1 crore per year related to Indira Fertility Academy

Revenue estimated for FY24: Rs. 1450 - 1,500 Cr

Gross Margin is around 70% over last 05 years

The EBITDA margin over the last 05 years period is 30%.

Capex: Hub clinics require Rs 5-6 crore of investment; spokes require Rs 85 Lakh- Rs 1 crore