Sahajanand Medical Technologies Limited IPO

01At a glance

What the company does — develops and makes Class III and Class C/D medical devices in vascular intervention (coronary stents and balloons) and structural heart (trans-catheter aortic valves and occluders), plus renal stents, peripheral drug-coated balloons and traded products (DRHP p.22).

Who pays it — hospitals and distributors; vascular-intervention devices were 65.86% of FY25 revenue and the Supraflex Cruz stent alone 42.06% (DRHP p.36, DRHP p.120).

Why it is raising money — it is not. The offer is entirely a sale of shares by Shree Hari Trust, Dhirajkumar Savjibhai Vasoya, Samara Capital Markets Holding, Kotak Pre IPO Opportunities Fund and NHPEA Sparkle Holding, and the company receives no proceeds (DRHP p.22, DRHP p.23).

How fast it has grown — revenue from ₹7,955 million in FY23 to ₹9,016 million in FY24 and ₹10,249 million in FY25 (DRHP p.120).

The one thing to understand — a sizeable device maker with low returns, whose investors are exiting. EBITDA margin was about 12% to 14% and return on equity 3.68% in FY25, while the selling investors hold over half the company between them (DRHP p.23, DRHP p.107, DRHP p.120).

02The business, in plain words

A cardiac-device maker designs and manufactures stents, balloons and valves, gets them approved by regulators, and sells them to hospitals through distributors for use by cardiologists.

A patient needs a coronary angioplasty → the hospital's cardiologist implants a Supraflex Cruz stent → the hospital buys the stent through Sahajanand's distributor → the company is paid by the distributor.

Earnings equation: Profit ≈ devices sold × (price − materials and manufacturing) − R&D, sales and distribution − interest. EBITDA margin was 12.49% in FY25 (DRHP p.120).

03Where the money comes from

Source: DRHP p.36, DRHP p.120.

04The growth record

Source: DRHP p.76, DRHP p.120.

05What the growth is made of

Steady volume, with structural-heart devices rising from 9.48% to 15.35% of revenue (DRHP p.120). Revenue grew about 13% a year while EBITDA grew about 7.5% a year (our arithmetic, DRHP p.120).

06Earnings quality

Operating cash flow of ₹1,602.53 million over FY23 to FY25 was well above profit of ₹297.32 million (our arithmetic, DRHP p.24, DRHP p.76). Net working capital was 144 days in FY25 (DRHP p.120). Imports were 73.67% of FY25 purchases (DRHP p.34). The company has filed a compounding application over delayed foreign-investment filings for allotments to Samara, NHPEA Sparkle and others (DRHP p.55).

07The balance sheet

Source: DRHP p.24, DRHP p.120.

08What the money is for

Source: DRHP p.23. No pre-IPO placement is contemplated (DRHP p.29).

09Who is selling

Source: DRHP p.22, DRHP p.107. The shares offered are about 27% of the company (our arithmetic). Average acquisition costs per share are ₹46.40 for Samara, ₹97.58 for NHPEA Sparkle and ₹262.46 for Kotak Pre IPO Opportunities Fund (DRHP p.29).

10Promoters

The promoters are Bhargav Dhirajlal Kotadia, Dhirajlal Vallabhbhai Kotadia, Priyanka Dhirajlal Cohen and Shree Hari Trust; Shree Hari Trust holds 36.79% and Bhargav Dhirajlal Kotadia a small direct stake (DRHP p.22, DRHP p.23). Proceedings against the promoters include one criminal and three tax matters, involving ₹60.34 million (DRHP p.25).

11Who already owns it

Source: DRHP p.107. The last row is our arithmetic.

12What changed just before the IPO

• Profit — back to a profit in FY25 after a FY24 loss (DRHP p.120).
• Borrowings — up from ₹1,322 million to ₹2,250 million over two years (DRHP p.24).
• Structural heart — up to 15% of revenue (DRHP p.120).

13Capacity and expansion

The offer funds nothing for the company (DRHP p.23). Capital spending was ₹489.97 million in FY25 (DRHP p.76).

14Market size and industry structure

The report cited in the offer document values the global vascular-devices market at about USD 24.3 billion in 2024, after 6.2% annual growth over five years (DRHP p.22). The figures are the report's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Regulated device approvals in India and abroad for Class III devices (DRHP p.22).
• A growing structural-heart line (DRHP p.120).

Against that: dependence on one stent, price regulation of medical devices, imported materials, and low returns (DRHP p.26, DRHP p.34, DRHP p.120).

16Peers the company named

Source: DRHP p.123. The peers' P/E ranges from 61.21 to 78.32, average 69.77 (DRHP p.119).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• One product. Supraflex Cruz was 42% of FY25 revenue (DRHP p.36).
• Price controls. Regulatory uncertainty over device pricing (DRHP p.26).
• Imports. Nearly three-quarters of purchases (DRHP p.34).
• Returns. Return on equity below 4% (DRHP p.120).
• Investor exit. Most offered shares come from financial investors (DRHP p.22).

18Litigation and regulatory matters

Source: DRHP p.25.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• What the ₹1,365.90 million of claims against the company consist of, in the pages read.
• How revenue splits between India and abroad, in the pages read.
• Why FY24 ended in a loss, in the pages read.
• What the criminal proceedings against the company and directors concern, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What are the 92 tax proceedings and five regulatory actions worth ₹1.37 billion?
2. Why is return on equity so low for a device maker of this size?
3. How exposed is Supraflex Cruz to price caps on stents?
4. What caused the FY24 loss?
5. Why are the investors, with average costs of ₹46 to ₹262 a share, selling now?

1Sources and cited facts

This study was read from 1 document the company filed. The 24 figures it cites are listed under the document each came from, with the page and the sentence as printed.