Clinitech Laboratory Ltd IPO

Clinitech Laboratory Limited was incorporated as Clinitech Laboratory Private Limited on March 19, 2010 under the Companies Act, 1956 with the Registrar of Companies, Mumbai bearing Registration number 201078. The status of the Company was changed to public limited and the name of the Company was changed to Clinitech Laboratory Limited vide Special Resolution dated July 24, 2023 pursuant to conversion of the Company into public limited Company. The fresh certificate of incorporation consequent to conversion was issued on August 25, 2023 by the Registrar of Companies, Mumbai. The Corporate Identification Number of the Company is U85195MH2010PLC201078.

The diagnostic industry has emerged as an attractive play in India's growing healthcare sector and is one of the fastest growing services in the country. The domestic diagnostic industry is estimated at USD9bn (around INR 675bn) and is expected to grow at a compounded annual growth rate (CAGR) of ~10% over the next 5 years. Growth will be primarily driven by change in demographics, increase in lifestyle diseases, and higher income levels across all strata of society, rise in preventive testing, deeper penetration with asset-light expansion, and spread of healthcare services and insurance. The diagnostic segment is a critical component of the healthcare sector. Globally, ~80% of physician diagnoses are a result of laboratory tests. There are mainly 3 types of tests: Routine, clinical lab and specialty tests. Routine tests: Common tests like sugar, cholesterol, HIV, pap, pregnancy, etc. Clinical lab tests to monitor diseases and drug treatments Specialty tests: Genetics, immunology, oncology, endocrinology and other critical segments. The Indian diagnostic industry is highly fragmented and under-penetrated despite the presence of over 1 lakh labs. Diagnostic chains command ~16% market share. The 4 major players - Dr Lal PathLabs (DLPL), Metropolis Healthcare (METROHL), SRL Diagnostics (SRL) and Thyrocare Technologies - have a share of ~6%. So, there is a huge opportunity for national players to consolidate and for organic expansion. We believe organized players with national presence would grow at 15-17% CAGR over the next five years and continue to garner market share, led by asset light models and strong cash flows. The growth of these diagnostics would be majorly volume-driven, given the high level of competition and government-imposed regulations. Attracted by historically high growth rates (20-25%) lucrative returns, and low entry barriers, most players compete on pricing to garner volumes quickly and move up the cost curve, supported by PE investors. To capture the increasingly important shift towards the consumer, industry leaders have started to implement initiatives such as retailer partnering, offering home testing, and enhancing engagement with patients through digital presence, in addition to maintaining their basic testing services as a safety net. A faster shift of unorganized business to organized players, potential consolidation, likely increase in preventive check-ups and sizeable scale would benefit large organized players with strong balance sheets. The industry is broadly segregated into pathology testing and imaging diagnostic services. Pathology testing (in-vitro diagnosis) includes sample collection in the form of blood, urine and stool. This is followed by the sample's analysation using laboratory equipment and technology to derive useful clinical information for assisting in patient treatment. The imaging diagnostic segment consist of more complex tests like computed tomography (CT) scans and magnetic resonance imaging (MRI) and other highly specialised tests like positron emission tomography (PET)-CT scans. As per estimates, the pathology segment contributes ~58% of total market revenue. With private diagnostic chains taking the lead with superior and quality services, highly accurate and wider test menu - resulting in market share gains - we expect consolidation in the sector going forward. Currently, only 1% of labs are National Accreditation Board of Laboratories (NABL) and/or College of American Pathologists (CAP) accredited. Only a few large national players like SRL, DLPL, METROHL, Thyrocare, Max Healthcare and Apollo Clinic have accredited labs.

Clinitech Laboratory Limited is a provider of diagnostic and healthcare tests and services through chain of 8 diagnostic centers in and around Thane and Navi Mumbai. The Promoters have 30+ years of experience in diagnostic business. The Company conducts more than 3 Lakh tests per year in its NABL (National Accreditation Board for Testing and Calibration Laboratories) accredited labs equipped with modern technology and high-end equipment.