Kotak Pre-IPO Opportunities Fund is in advanced discussions to acquire a 15% stake in Neuberg Diagnostics, a rapidly growing diagnostics chain founded by serial healthcare entrepreneur GSK Velu. The India-focused fund is expected to invest approximately Rs 450 crore in Neuberg as part of this pre-IPO round. Velu, who previously sold his stake in Metropolis Healthcare, plans to use this investment for strategic acquisitions and further expansion before a potential initial public offering (IPO) next year.
Neuberg, founded by Velu in 2017, operates in India, the UAE, Sri Lanka, and South Africa, offering over 5,000 types of pathological tests and conducting more than 16 million tests annually. Velu, who is also the promoter of Trivitron Healthcare and an investor in Kauvery Hospital, has been actively growing his healthcare portfolio, and this latest deal is part of his strategy to expand Neuberg’s footprint in the competitive diagnostics market.
Investment bank O3 Capital is advising Neuberg on the fundraising process. The Kotak Pre-IPO Opportunities Fund, which manages Rs 2,000 crore, has a track record of investing in late-stage companies. Notable investments include API Holdings (PharmEasy), Pine Labs, Nykaa, and PolicyBazaar. Investors in the fund include family offices such as Catamaran (founded by Infosys’ NR Narayana Murthy) and Skywalker of the Rubamin Group.
Neuberg’s recent merger with Supratech Reference Laboratory and Anand Reference Laboratory is expected to pave the way for its IPO plans by 2024 or 2025. Velu aims to build a strong, competitive position in the growing diagnostics sector, which is expected to reach $43.57 billion by 2032.
As reported by economictimes, the Indian diagnostics industry has seen significant growth, driven by factors like rising healthcare spending, increasing awareness about preventive testing, and the growing availability of advanced diagnostic technologies. Despite the market being highly fragmented, organized players like Neuberg are poised to capture a larger share as the sector expands.