India Life Sciences Fund II to invest Rs 92 crore in CPO & Relisys Medical Devices
Both deals are fairly unique according to industry trackers, who said that these segments have not attracted sizeable capital due to factors hampering distribution.
By Madhav Chanchani, ET Bureau | Updated:
MUMBAI: India Life Sciences Fund II is investing Rs 92 crore in Delhi-based Comprehensive Prosthetics and Orthotics (CPO), which makes artificial limbs and Hyderabad Relisys Medical Devices, which claims to make the cheapest stents for treatment of narrow or weak arteries. The deal signals increasing interest among sector focused private equity investors to back new niches in healthcare.
The fund will invest Rs 60 crore in CPO and the rest Rs 32 crore in Relisys, a company which had its origins in low-cost KalamRaju being developed with help of former President APJ Abdul Kalam. The investments come after India Life Sciences Fund II raised Rs 865 crore last year to back midmarket companies in healthcare services, pharmaceuticals and medical technology.
Both deals are fairly unique according to industry trackers, who said that these segments have not attracted sizeable capital due to factors hampering distribution or lack of companies.
This has been the case even as healthcare services, equipment and technology market has emerged as one of the key themes in private equity and venture capital dealmaking, with $2.7 billion across 222 deals since 2011, according to VCCEdge. This includes some capital from sector focused investors like India Life Sciences Fund, but largely infusion from generalist PEVC firms. "These are new areas which will take some time to develop. These kind of deals will be one-off," said Shiraz Bugwadia, managing director of investment bank o3 Capital and a pharma and healthcare specialist.
CPO was founded by non-resident Indian Amit Bhanti and US resident Don Goertzen, who himself is an amputee. Both are certified prosthetist and orthotists, who set up the company in 2005 and raised first round of funding from Ventureast Life Fund in 2011.
"Currently, amputees have a choice be tween the low-end Jaipur foot or the very expensive prostheses sold by multinational corporations like Ottobock. CPO offers high-quality prostheses at affordable prices," said Hari Buggana, managing director of InvAscent, investment advisor to India Life Sciences Fund II.
CPO also sees a large opportunity in orthotics, where rising issues like neck and back pain need regular treatment. The company currently has 20 clinics in the United States, six in India and does about .
Rs 60 crore in revenues. With the current round of funding, CPO plans to expand the number of clinics in India to 60, which will be used for service and fitments.
Relisys, which was started by cardiologists in Hyderabad’s CARE Hospitals, is looking to capture the market share from ment advisor to India Life Sciences Fund II.
CPO also sees a large opportunity in orthotics, where rising issues like neck and back pain need regular treatment. The company currently has 20 clinics in the United States, six in India and Rs 60 crore in revdoes about ` enues. With the current round of funding, CPO plans to expand the num ber of clinics in India to 60, which will be used for service and fitments.
Relisys, which was started by cardiologists in Hyderabad's CARE Hospitals, is looking to capture the market share from MNCs like Abbott and Boston Scientific by creating low-cost alternatives.
The company, led by chairman Dr N Krishna Reddy, also makes diagnostic catheters and balloon catheters.
According to Buggana, Relisys is a fullyintegrated manufacturer of cardiac stent systems. "Therefore, we believe it is very well positioned to capture a significant share of the demand for drug eluting stents in India and other emerging markets," he said. But the company will have to ensure that it continues to deliver quality at low prices to capture market, which was pegged at $450 million (about Rs 2,700 crore) and growing at 22% in 2012.
"The market for stents is large, but companies have not matured in the space so they can cover a large geography. Companies need to service the entire market around stents and also provide other cardio devices," said Mayur Sirdesai, director at healthcare focused investment firm Somerset Indus Capital.
The fund will invest Rs 60 crore in CPO and the rest Rs 32 crore in Relisys, a company which had its origins in low-cost KalamRaju being developed with help of former President APJ Abdul Kalam. The investments come after India Life Sciences Fund II raised Rs 865 crore last year to back midmarket companies in healthcare services, pharmaceuticals and medical technology.
Both deals are fairly unique according to industry trackers, who said that these segments have not attracted sizeable capital due to factors hampering distribution or lack of companies.
This has been the case even as healthcare services, equipment and technology market has emerged as one of the key themes in private equity and venture capital dealmaking, with $2.7 billion across 222 deals since 2011, according to VCCEdge. This includes some capital from sector focused investors like India Life Sciences Fund, but largely infusion from generalist PEVC firms. "These are new areas which will take some time to develop. These kind of deals will be one-off," said Shiraz Bugwadia, managing director of investment bank o3 Capital and a pharma and healthcare specialist.
CPO was founded by non-resident Indian Amit Bhanti and US resident Don Goertzen, who himself is an amputee. Both are certified prosthetist and orthotists, who set up the company in 2005 and raised first round of funding from Ventureast Life Fund in 2011.
"Currently, amputees have a choice be tween the low-end Jaipur foot or the very expensive prostheses sold by multinational corporations like Ottobock. CPO offers high-quality prostheses at affordable prices," said Hari Buggana, managing director of InvAscent, investment advisor to India Life Sciences Fund II.
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CPO also sees a large opportunity in orthotics, where rising issues like neck and back pain need regular treatment. The company currently has 20 clinics in the United States, six in India and does about .
Rs 60 crore in revenues. With the current round of funding, CPO plans to expand the number of clinics in India to 60, which will be used for service and fitments.
Relisys, which was started by cardiologists in Hyderabad’s CARE Hospitals, is looking to capture the market share from ment advisor to India Life Sciences Fund II.
CPO also sees a large opportunity in orthotics, where rising issues like neck and back pain need regular treatment. The company currently has 20 clinics in the United States, six in India and Rs 60 crore in revdoes about ` enues. With the current round of funding, CPO plans to expand the num ber of clinics in India to 60, which will be used for service and fitments.
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Relisys, which was started by cardiologists in Hyderabad's CARE Hospitals, is looking to capture the market share from MNCs like Abbott and Boston Scientific by creating low-cost alternatives.
The company, led by chairman Dr N Krishna Reddy, also makes diagnostic catheters and balloon catheters.
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According to Buggana, Relisys is a fullyintegrated manufacturer of cardiac stent systems. "Therefore, we believe it is very well positioned to capture a significant share of the demand for drug eluting stents in India and other emerging markets," he said. But the company will have to ensure that it continues to deliver quality at low prices to capture market, which was pegged at $450 million (about Rs 2,700 crore) and growing at 22% in 2012.
"The market for stents is large, but companies have not matured in the space so they can cover a large geography. Companies need to service the entire market around stents and also provide other cardio devices," said Mayur Sirdesai, director at healthcare focused investment firm Somerset Indus Capital.
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Hailed and applauded for doing it at a fraction of a cost and in its first attempt, ISRO's Mars Orbiter has produced a huge fillip to technology in the country. What has remained largely under the radar is that a significant part of the technology has in fact come from our small and medium technology companies from across the country.
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