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DRAFT RED HERRING PROSPECTUS
Dated: September 27, 2018
Please read Section 32 of the Companies Act, 2013
(This Draft Red Herring Prospectus will be updated upon filing with the RoC)
100% Book Built Offer
METROPOLIS HEALTHCARE LIMITED
Dr. Sushil Kanubhai Shah, one of our Promoters, commenced a pathology business in January 1980 as a partnership firm under the name of Dr. V. K. Desai’s Hospital, which was subsequently converted into a private limited
company, namely, Metropolis Health Services (India) Private Limited (“MHSIPL”) in 2003 under the Companies Act, 1956. The name of MHSIPL was changed to Metropolis Health Services (India) Limited (“MHSIL”) pursuant
to a ‘Fresh Certificate of Incorporation Consequent upon Change of Name on Conversion to Public Limited Company’ granted by the RoC on March 1, 2006. In 2009, MHSIL amalgamated into Pathnet India Private Limited, which
was wholly owned subsidiary of MHSIL. Pathnet India Private Limited subsequently changed its name to Metropolis Healthcare Limited (our “Company” or the “Company” or the “Issuer”). Pathnet India Private Limited was
incorporated at New Delhi as a private limited company under the Companies Act, 1956 pursuant to the ‘Certificate of Incorporation’ granted by the Registrar of Companies, N. C. T. of Delhi and Haryana on November 10, 2000.
The name of our Company was changed to Pathnet India Limited pursuant to a ‘Fresh Certificate of Incorporation Consequent upon Change of Name on Conversion to Public Limited Company’ granted by the Registrar of Companies,
Maharashtra at Mumbai (the “RoC”) on July 1, 2009. The name of our Company was changed to Metropolis Healthcare Limited pursuant to a ‘Fresh Certificate of Incorporation Consequent upon Change of Name’ granted by the
RoC on September 23, 2009. For further details, see “History and Certain Corporate Matters” on page 158.
Registered and Corporate Office: 250 D Udyog Bhavan, Hind Cycle Marg, Worli, Mumbai 400 030, Maharashtra, India; Tel: (91 22) 6258 2810 Facsimile: Not available
Contact Person: Jayant Prakash, Head Legal, Company Secretary and Compliance Officer; E-mail: [email protected]; Website: www.metropolisindia.com
Corporate Identity Number: U73100MH2000PLC192798
PROMOTERS OF OUR COMPANY: DR. SUSHIL KANUBHAI SHAH, AMEERA SUSHIL SHAH AND METZ ADVISORY LLP
INITIAL PUBLIC OFFERING OF UP TO 15,269,684 EQUITY SHARES OF FACE VALUE OF ` 2 EACH (THE “EQUITY SHARES”) OF OUR COMPANY FOR CASH AT A PRICE OF ` [●] PER EQUITY SHARE AGGREGATING UP TO ` [●] MILLION, CONSISTING OF AN OFFER FOR SALE OF UP TO 5,017,868 EQUITY SHARES BY DR. SUSHIL KANUBHAI SHAH (THE “PROMOTER SELLING SHAREHOLDER”) AGGREGATING UP TO [●] MILLION AND UP TO 10,251,816 EQUITY SHARES BY CA LOTUS INVESTMENTS (THE “INVESTOR SELLING SHAREHOLDER”) AGGREGATING UP
TO [●] MILLION (THE “OFFER”). THE OFFER INCLUDES A RESERVATION OF UP TO 300,000 EQUITY SHARES AGGREGATING UP TO ` [●] MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREINAFTER) (THE “EMPLOYEE RESERVATION PORTION”). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS
THE “NET OFFER” AND SUCH NET OFFER AGGREGATES UP TO 14,969,684 EQUITY SHARES. THE OFFER AND THE NET OFFER SHALL CONSTITUTE [●]% AND [●]%, RESPECTIVELY, OF THE
POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
THE FACE VALUE OF EQUITY SHARES IS ₹ 2 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDERS IN
CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS (“BRLMS”) AND WILL BE ADVERTISED IN ALL EDITIONS OF [●] (A WIDELY CIRCULATED ENGLISH NATIONAL DAILY
NEWSPAPER), ALL EDITIONS OF [●] (A HINDI NATIONAL DAILY NEWSPAPER) AND THE [●] EDITION OF [●] (A WIDELY CIRCULATED MARATHI NEWSPAPER, MARATHI BEING THE
REGIONAL LANGUAGE OF MAHARASHTRA WHERE OUR REGISTERED OFFICE IS LOCATED), AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/OFFER OPENING DATE IN ACCORDANCE
WITH THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS AMENDED (“SEBI ICDR REGULATIONS”) AND
SHALL BE MADE AVAILABLE TO BSE LIMITED (“BSE”) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE”, AND TOGETHER WITH BSE, THE “STOCK EXCHANGES”) FOR THE
PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.
In case of any revision to the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days fo llowing such revision of the Price Band, subject to the Bid/Offer Period not exceeding 10 Working
Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by indicating the change on the
respective websites of the Book Running Lead Managers and at the terminals of the Syndicate Members and by intimation to Self-Certified Syndicate Banks (“SCSBs”) and other Designated Intermediaries, as applicable.
In terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”) read with Regulation 41 of the SEBI ICDR Regulations, the Offer is being made for at least 10% of the post-Offer paid up
Equity Share capital of our Company. Further, the Offer is being made through the Book Building Process, in compliance with Regulation 26(2) of the SEBI ICDR Regulations, wherein at least 75% of the Net Offer shall be
Allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (“QIB Portion”), provided that our Company and the Selling Shareholders, in consultation with the BRLMs, may allocate up to 60% of the QIB Portion
to Anchor Investors, on a discretionary basis (“Anchor Investor Portion”), of which one-third shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the
Anchor Investor Allocation Price. In the event of undersubscription, or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the QIB Portion. Further, 5% of the QIB Portion (excluding the
Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the QIB Portion shall be available for allocation on a proportionate basis to QIBs, subject to valid Bids
being received from them at or above the Offer Price. If at least 75% of the Net Offer cannot be Allotted to QIBs, the entire application money shall be refunded forthwith. Further, not more than 15% of the Net Offer will be
available for allocation on a proportionate basis to Non-Institutional Investors and not more than 10% of the Net Offer will be available for allocation to Retail Individual Investors, in accordance with the SEBI ICDR Regulations,
subject to valid Bids being received at or above the Offer Price. All Bidders (except Anchor Investors) shall mandatorily participate in this Offer only through the Application Supported by Blocked Amount (“ASBA”) process
and shall provide details of their respective bank account in which the Bid amount will be blocked by the SCSBs. Anchor Investors are not permitted to participate in the Anchor Investor Portion through the ASBA process. For
details, see “Offer Procedure” on page 551.
RISK IN RELATION TO THE FIRST OFFER
This being the first public offer of our Company, there has been no formal market for the Equity Shares. The face value of each Equity Shares is ₹ 2 and the Floor Price is [●] times the face value and the Cap Price is [●] times the
face value. The Offer Price is [●] times the face value of the Equity Shares. The Offer Price (determined and justified by our Company and the Selling Shareholders in consultation with the Book Running Lead Managers and in
accordance with the SEBI ICDR Regulations, and as stated under “Basis for Offer Price” on page 110) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance
can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS
Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Offer unless they can afford to take the risk of losing their investment. Investors are advised to read the
risk factors carefully before taking an investment decision in the Offer. For taking an investment decision, investors must rely on their own examination of our Company and the Offer, including the risks involved. The Equity
Shares in the Offer have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Red Herring Prospectus.
Specific attention of the investors is invited to “Risk Factors” on page 18.
COMPANY’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Offer, which is material in the
context of the Offer, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are
honestly held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material
respect. Further, each Selling Shareholder severally and not jointly accepts responsibility for and confirms only statements made or undertaken expressly by such Selling Shareholder in this Draft Red Herring Prospectus solely in
relation to itself as a Selling Shareholder and/ or its respective portion of the Offered Shares and confirms that such statements are true and correct and are not misleading. Each Selling Shareholder assumes no responsibility for
any other statements, including, inter alia, any of the statements made by or relating to our Company or its business or by the other Selling Shareholder or by any other person in this Draft Red Herring Prospectus.
LISTING
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on BSE and NSE. Our Company has received an ‘in-principle’ approval from BSE and NSE for the listing of the Equity Shares pursuant to
letters dated [●] and [●], respectively. For the purposes of the Offer, the Designated Stock Exchange shall be [●]. A signed copy of the Red Herring Prospectus and the Prospectus shall be delivered for registration to the
RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents available for inspection from the date of the Red Herring Prospectus up to the Bid/Offer
Closing Date, see “Material Contracts and Documents for Inspection” on page 676.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE
OFFER
JM Financial Limited
7th Floor, Cnergy
Appasaheb Marathe Marg
Prabhadevi
Mumbai 400 025
Tel: (91 22) 6630 3030
Facsimile: (91 22) 6630 3330
Email:
Investor Grievance Email:
Website: www.jmfl.com
Contact Person: Prachee Dhuri
SEBI Registration Number:
INM000010361
Credit Suisse Securities (India)
Private Limited^
9th Floor, Ceejay House
Dr. Annie Besant Road,
Worli, Mumbai 400 018
Tel: (91 22) 6777 3885
Facsimile: (91 22) 6777 3820
Email: list.metropolisipo@credit-
suisse.com
Investor Grievance Email:
list.metropolisipo@credit-
suisse.com
Website: www.credit-suisse.com
Contact Person: Akshay Lulla
SEBI Registration Number:
INM000011161
Goldman Sachs (India)
Securities Private Limited
Rational House
951-A, Appasaheb Marathe
Marg, Prabhadevi
Mumbai 400 025
Tel: (91 22) 6616 9000
Facsimile: (91 22) 6616 9001
Email: gs-metropolis-
Investor Grievance Email:
Website:
www.goldmansachs.com
Contact Person: Sonam Chopra
SEBI Registration Number:
INM000011054
HDFC Bank Limited
Investment Banking Group
Unit No. 401 & 402, 4th Floor
Tower B, Peninsula Business
Park, Lower Parel
Mumbai 400 013
Tel: (91 22) 3395 8233
Facsimile: (91 22) 3078 8584
E-mail:
Investor Grievance e-mail:
m
Website: www.hdfcbank.com
Contact Person: Rakesh
Bhunatar/Ravi Sharma
SEBI Registration No.:
INM000011252
Kotak Mahindra Capital
Company Limited
1st Floor, 27 BKC, Plot No. 27
G Block, Bandra Kurla Complex
Bandra (East)
Mumbai 400 051
Tel: (91 22) 4336 0000
Facsimile: (91 22) 6713 2447
Email:
Investor Grievance Email:
Website:
www.investmentbank.kotak.com
Contact Person: Ganesh Rane
SEBI Registration Number:
INM000008704
Link Intime India Private
Limited
C-101, 1st floor, 247 Park
L B S Marg
Vikhroli West
Mumbai 400 083
Tel: (91 22) 4918 6200
Facsimile: (91 22) 4918 6195
E-mail:
Investor grievance e-mail:
Website: www.linkintime.co.in
Contact Person: Shanti
Gopalkrishnan
SEBI Registration No.:
INR000004058
BID/OFFER PROGRAMME
BID/OFFER OPENS ON [●]*
BID/OFFER CLOSES ON [●]** *Our Company and the Selling Shareholders may in consultation with the Book Running Lead Managers, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor Bid/Offer
Period shall be one Working Day prior to the Bid/Offer Opening Date.
**Our Company and the Selling Shareholders may, in consultation with the Book Running Lead Managers, consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date in accordance with
the SEBI ICDR Regulations ^In compliance with the proviso to Regulation 21A(1) of the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, as amended, read with proviso to Regulation 5(3) of the SEBI ICDR Regulations, Credit
Suisse Securities (India) Private Limited is involved as a merchant banker only in marketing of the Offer.
mailto:[email protected]:[email protected]://www.jmfl.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]://www.credit-suisse.com/mailto:[email protected]:[email protected]:[email protected]://www.goldmansachs.com/mailto:[email protected]:[email protected]:[email protected]://www.investmentbank.kotak.com/mailto:[email protected]://www.linkintime.co.in/
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TABLE OF CONTENTS
SECTION I – GENERAL ...................................................................................................................................... 1
DEFINITIONS AND ABBREVIATIONS ........................................................................................................ 1 CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA
AND CURRENCY OF PRESENTATION ..................................................................................................... 13 FORWARD-LOOKING STATEMENTS ....................................................................................................... 16 SECTION II - RISK FACTORS ..................................................................................................................... 18
SECTION III – INTRODUCTION ...................................................................................................................... 48
SUMMARY OF INDUSTRY ......................................................................................................................... 48 SUMMARY OF BUSINESS ........................................................................................................................... 53 SUMMARY FINANCIAL INFORMATION ................................................................................................. 61 THE OFFER .................................................................................................................................................... 79 GENERAL INFORMATION .......................................................................................................................... 81 CAPITAL STRUCTURE ................................................................................................................................ 90 OBJECTS OF THE OFFER .......................................................................................................................... 108 BASIS FOR OFFER PRICE .......................................................................................................................... 110 STATEMENT OF TAX BENEFITS ............................................................................................................. 114
SECTION IV: ABOUT THE COMPANY ......................................................................................................... 117
INDUSTRY OVERVIEW ............................................................................................................................. 117 OUR BUSINESS ........................................................................................................................................... 135 REGULATIONS AND POLICIES ............................................................................................................... 154 HISTORY AND CERTAIN CORPORATE MATTERS .............................................................................. 158 OUR SUBSIDIARIES ................................................................................................................................... 171 OUR MANAGEMENT ................................................................................................................................. 181 OUR PROMOTERS AND PROMOTER GROUP ....................................................................................... 194 OUR GROUP COMPANIES ........................................................................................................................ 198 RELATED PARTY TRANSACTIONS ........................................................................................................ 201 DIVIDEND POLICY .................................................................................................................................... 202
SECTION V – FINANCIAL INFORMATION ................................................................................................. 203
FINANCIAL STATEMENTS ....................................................................................................................... 203 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ...................................................................................................................... 492 FINANCIAL INDEBTEDNESS ................................................................................................................... 512
SECTION VI – LEGAL AND OTHER INFORMATION ................................................................................ 513
OUTSTANDING LITIGATION AND OTHER MATERIAL DEVELOPMENTS ..................................... 513 GOVERNMENT AND OTHER APPROVALS ........................................................................................... 522 OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................ 525
SECTION VII – OFFER RELATED INFORMATION ..................................................................................... 543
OFFER STRUCTURE ................................................................................................................................... 543 TERMS OF THE OFFER .............................................................................................................................. 546 OFFER PROCEDURE .................................................................................................................................. 551 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ............................................. 597
SECTION VIII – MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ................................................. 598
SECTION IX – OTHER INFORMATION ........................................................................................................ 676
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ...................................................... 676
DECLARATION ................................................................................................................................................ 678
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SECTION I – GENERAL
DEFINITIONS AND ABBREVIATIONS
This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise
indicates or implies, shall have the meanings ascribed to such terms herein, and references to any legislation, act,
rule, regulation, circular, guideline, policy, notification or clarification will include any amendments or re-
enactments thereto, from time to time. In case of any inconsistency between the definitions given below and the
definitions contained in the General Information Document (as defined below), the definitions given in this section
shall prevail.
Notwithstanding the foregoing, terms in the sections “Main Provisions of the Articles of Association”, “Statement
of Tax Benefits”, “Objects of the Offer”, “Industry Overview”, “Our Business”, “Risk Factors”, “Regulations
and Policies”, “Financial Information”, “Outstanding Litigation and Other Material Developments” and “Part
B” of “Offer Procedure”, will have the meaning ascribed to such terms in those respective sections.
General terms
Term Description
“our Company”, “the
Company” or “the Issuer”,
Metropolis Healthcare Limited, a public company incorporated under the Companies Act,
1956 and having its Registered and Corporate Office at 250 D Udyog Bhavan, Hind Cycle
Marg, Worli, Mumbai 400 030
“we”, “us” or “our” Our Company and Subsidiaries, on a consolidated basis
Company Related Terms
Term Description
AoA/Articles of Association/
Articles
The articles of association of our Company, as amended from time to time
Audit Committee The audit committee of our Board, constituted in accordance with Regulation 18 of the SEBI
Listing Regulations and Section 177 of the Companies Act, 2013, as described in “Our
Management” on page 181
Auditors/Statutory Auditors The statutory auditor of our Company, being B S R & Co. LLP, Chartered Accountants
Board/Board of Directors The board of directors of our Company, or a duly constituted committee thereof
Bonus Issue Allotment of 385,990 Equity Shares dated September 15, 2018 by our Company to the
Shareholders as on September 14, 2018 by way of bonus issue in the ratio of 1:25 (one
Equity Share issued for every 25 Equity Shares held)
Corporate Social
Responsibility Committee
The corporate social responsibility committee of our Board, constituted in accordance with
Section 135 of the Companies Act, 2013 and the Companies (Corporate Social
Responsibility Policy) Rules, 2014, the details of which are provided in “Our Management”
on page 181
Compliance Officer Compliance officer of our Company in terms of SEBI ICDR Regulations and SEBI Listing
Regulations
Director(s) The director(s) on our Board
Equity Shares The equity shares of our Company of face value of ` 2 each ESOP Schemes MESOS 2007 and MESOS 2015, collectively
Executive Directors Whole time directors of our Company, in terms of the Companies Act
Group Companies Such companies as covered under the applicable accounting standards and other companies
as considered material by our Board, if any, in accordance with the materiality policy adopted
by our Board on September 24, 2018. For further details, see “Our Group Companies” on
page 198
Independent Director(s) The independent director(s) of our Company, in terms of Section 2(47) and Section 149(6) of
the Companies Act, 2013
Investor Selling Shareholder CA Lotus Investments
IPO Committee The committee of our Board constituted pursuant to a resolution passed by our Board on
September 24, 2018 to facilitate the process of the Offer.
Key Management Personnel/
Key Managerial Personnel/
KMP
Key management personnel of our Company in terms of Regulation 2(1)(s) of the SEBI ICDR
Regulations, together with the key managerial personnel of our Company in terms of Section
2(51) of the Companies Act, 2013 and as described in “Our Management” on page 181
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Term Description
MoA/Memorandum
of Association
The memorandum of association of our Company, as amended from time to time
MESOS 2007 Metropolis Employee Stock Option Scheme, 2007 of our Company. For details, see “Capital
Structure” on page 90
MESOS 2015 Metropolis Employee Stock Option Scheme 2015 of our Company. For details, see “Capital
Structure” on page 90
MHSIPL Metropolis Health Services (India) Private Limited
Nomination and
Remuneration Committee/
NRC
The nomination and remuneration committee of our Board, constituted in accordance with
Regulation 19 of the SEBI Listing Regulations and Section 178 of the Companies Act, 2013,
the details of which are provided in “Our Management” on page 181
Non-Executive Directors Non-executive directors of our Company
Promoter Group Such persons and entities constituting the promoter group in accordance with Regulation 2(1)
(zb) of the SEBI ICDR Regulations. For further details, see “Our Promoters and Promoter
Group” on page 194
Promoters The Promoters of our Company namely, Dr. Sushil Kanubhai Shah, Ameera Sushil Shah
and Metz Advisory LLP. For further details, see “Our Promoters and Promoter Group” on
page 194
Promoter Selling Shareholder Dr. Sushil Kanubhai Shah
Registered and Corporate
Office
Registered and corporate office of our Company located at 250 D Udyog Bhavan, Hind Cycle
Marg, Worli, Mumbai 400 030
Registrar of Companies/RoC The Registrar of Companies, Maharashtra at Mumbai located at 100, Everest, Marine Drive,
Mumbai 400 002, Maharashtra, India
Restated Consolidated Ind
AS Financial Information
The consolidated financial information of our Company, which comprises of the restated
consolidated Ind AS summary statement of assets and liabilities, the restated consolidated
Ind AS summary statement of profit and loss, the restated consolidated Ind AS statement
of changes in equity and the restated consolidated Ind AS summary statement of cash flows,
for Fiscals ended March 31, 2018, March 31, 2017 and March 31, 2016, and the significant
accounting policies and other information including schedules, notes, and annexures
thereto, included in this Draft Red Herring Prospectus, prepared under Ind AS and restated
in accordance with the SEBI ICDR Regulations, SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31, 2016; and Guidance Note on Reports
in Company Prospectuses (Revised 2016) issued by ICAI, and included in “Financial
Statements” on page 203
Restated Consolidated Indian
GAAP Financial Information
The consolidated financial information of our Company, which comprises of the restated
consolidated Indian GAAP summary statement of assets and liabilities, the restated
consolidated Indian GAAP summary statement of profit and loss and the restated
consolidated Indian GAAP summary statement of cash flows, for Fiscals ended March 31,
2015 and March 31, 2014, and the significant accounting policies and other information
included in this Draft Red Herring Prospectus, prepared under Indian GAAP and restated
in accordance with the SEBI ICDR Regulations, SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31, 2016 and Guidance Note on Reports
in Company Prospectuses (Revised 2016) issued by ICAI, and included in “Financial
Statements” on page 203
Restated Consolidated
Summary Statements
Restated Consolidated Ind AS Financial Information and Restated Consolidated Indian
GAAP Financial Information, on a collective basis
Restated Standalone
Summary Statements
Restated Standalone Ind AS Financial Information and Restated Standalone Indian GAAP
Financial Information, on a collective basis
Restated Summary
Statements
Collectively, the Restated Consolidated Summary Statements and Restated Standalone
Summary Statements
Restated Standalone Ind AS
Financial Information
The standalone financial information of our Company, which comprise of the restated
standalone Ind AS summary statement of assets and liabilities, the restated standalone Ind
AS summary statement of profit and loss, the restated standalone Ind AS statement of
changes in equity and the restated standalone Ind AS summary statement of cash flows, for
Fiscals ended March 31, 2018, March 31, 2017 and March 31, 2016, and the significant
accounting policies and other information including the schedules, notes and annexures
thereto, included in this Draft Red Herring Prospectus, prepared under Ind AS and restated
in accordance with the SEBI ICDR Regulations, SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31, 2016 and Guidance Note on Reports
in Company Prospectuses (Revised 2016) issued by ICAI, and included in “Financial
Statements” on page 203
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Term Description
Restated Standalone Indian
GAAP Financial Information
The standalone financial information of our Company, which comprise of the restated
standalone Indian GAAP summary statement of assets and liabilities, the restated
standalone Indian GAAP summary statement of profit and loss and the restated standalone
Indian GAAP summary statement of cash flows, for Fiscals ended March 31, 2015 and
March 31, 2014, and the significant accounting policies and other information included in
this Draft Red Herring Prospectus, prepared under Indian GAAP and restated in accordance
with the SEBI ICDR Regulations SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/47 dated
March 31, 2016 and Guidance Note on Reports in Company Prospectuses (Revised 2016)
issued by ICAI, and included in “Financial Statements” on page 203
Scheme of Amalgamation
2009
Scheme of amalgamation between Pathnet India Private Limited and Metropolis Health
Services (India) Limited, Metro Home Health Services Private Limited, Lister Metropolis
Laboratory and Research Centre Private Limited, Tripoli Path Lab Private Limited and
Diwanchand Metropolis Diagnostics Services Private Limited, which came into effect on
January 30, 2009. For details, see “History and Certain Corporate Matters” on page 158
Scheme of Amalgamation
2018
Scheme of amalgamation between our Company and Bacchus Hospitality Services and
Real Estate Private Limited, Metropolis Healthcare (Chandigarh) Private Limited,
Metropolis Healthcare (Jodhpur) Private Limited, Final Diagnosis Private Limited, Sanket
Metropolis Health Services (India) Private Limited and Golwilkar Metropolis Health
Services (India) Private Limited, which came into effect on September 8, 2018. For details,
see “History and Certain Corporate Matters” on page 158
Selling Shareholders Promoter Selling Shareholder and Investor Selling Shareholder, collectively
Shareholders Shareholders of our Company holding Equity Shares, from time to time
SPA Share Purchase Agreement dated September 27, 2018 entered into between Ameera Sushil
Shah, Dr. Sushil Kanubhai Shah, Dr. Duru Sushil Shah, Metz Advisory LLP, CA Lotus
Investments and our Company
Stakeholder’s Relationship
Committee
The stakeholder’s relationship committee of our Board, constituted in accordance with
Regulation 20 of the SEBI Listing Regulations and Section 178 of the Companies Act, 2013,
the details of which are provided in “Our Management” on page 181
Sub-Division Sub-division of share capital of the Company by sub-dividing the face value of Equity Shares
from ₹ 10 to ₹ 2 per Equity Share, pursuant to a Shareholders’ resolution dated September 14,
2018 (with effect from September 20, 2018). Accordingly, the issued and paid-up capital of
our Company was sub-divided from 10,035,736 Equity Shares of ₹ 10 each to 5,01,78,680
Equity Shares of ₹ 2 each.
Subsidiaries
The subsidiaries of our Company, namely:
1. Desai Metropolis Health Services Private Limited; 2. Lab One Metropolis Healthcare Services Private Limited; 3. Micron Metropolis Healthcare Private Limited; 4. Amin’s Pathology Laboratory Private Limited; 5. Ekopath Metropolis Lab Services Private Limited; 6. Sudharma Metropolis Health Services Private Limited; 7. Dr. Patel Metropolis Healthcare Private Limited; 8. R.V. Metropolis Diagnostic & Health Care Center Private Limited; 9. Metropolis Histoxpert Digital Services Private Limited; 10. Bokil Golwilkar Metropolis Health Care Private Limited; 11. Raj Metropolis Healthcare Private Limited; 12. Metropolis Healthcare (Mauritius) Limited; 13. Metropolis Star Lab Kenya Limited; 14. Metropolis Healthcare Lanka (Pvt) Limited; 15. Metropolis Bramser Lab Services (Mtius) Limited; 16. Metropolis Healthcare Ghana Ltd; 17. Metropolis Healthcare Uganda Limited; and 18. Metropolis Healthcare (Tanzania) Limited
Subsidiary Shareholding
Acquisitions
Acquisition of shareholding by our Company in (i) R.V. Metropolis Diagnostic & Health
Care Center Private Limited; (ii) Desai Metropolis Health Services Private Limited; (iii)
Lab One Metropolis Healthcare Services Private Limited; and (iv) Sudharma Metropolis
Health Services Private Limited, pursuant to separate share purchase agreements each dated
September 6, 2018, to make these entities wholly owned subsidiaries of our Company.
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Offer Related Terms
Term Description
Acknowledgment Slip The slip or document issued by the Designated Intermediary(ies) to a Bidder as proof of
registration of the Bid cum Application Form
Allotted/Allotment/Allot Unless the context otherwise requires, the allotment of Equity Shares to successful Bidders
pursuant to transfer of the Offered Shares by the Selling Shareholders to the successful
Bidders, pursuant to the Offer
Allotment Advice The note or advice or intimation of Allotment, sent to each successful Bidder who has been
or would be Allotted the Equity Shares after approval of the Basis of Allotment by the
Designated Stock Exchange
Allottee A successful Bidder to whom the Equity Shares are Allotted
Anchor Investor A QIB, who applies under the Anchor Investor Portion in accordance with the requirements
specified in the SEBI ICDR Regulations and the Red Herring Prospectus. For further
details, see “Offer Procedure” on page 551
Anchor Investor Allocation
Price
The price at which Equity Shares will be allocated to the Anchor Investors in terms of the
Red Herring Prospectus and the Prospectus, which will be decided by our Company and
the Selling Shareholders, in consultation with the BRLMs
Anchor Investor Bidding Date The date, one Working Day prior to the Bid/Offer Opening Date on which Bids by Anchor
Investors shall be submitted, prior to and after which the BRLMs will not accept any Bids
in the Anchor Investor Portion, and allocation to the Anchor Investors shall be completed
Anchor Investor Offer Price The final price at which the Equity Shares will be Allotted to Anchor Investors in terms of
the Red Herring Prospectus and the Prospectus, which will be a price equal to or higher
than the Offer Price but not higher than the Cap Price. The Anchor Investor Offer Price
will be decided by our Company and the Selling Shareholders, in consultation with the
BRLMs
Anchor Investor Portion Up to 60% of the QIB Portion, which may be allocated by our Company and the Selling
Shareholders, in consultation with the BRLMs, to Anchor Investors, on a discretionary
basis, in accordance with SEBI ICDR Regulations. One-third of the Anchor Investor
Portion is reserved for domestic Mutual Funds, subject to valid Bids being received from
domestic Mutual Funds at or above the Anchor Investor Allocation Price
Application Supported by
Blocked Amount/ASBA
The application (whether physical or electronic) by a Bidder (other than Anchor Investors)
to make a Bid authorising the relevant SCSB to block the Bid Amount in the relevant
ASBA Account
ASBA Account A bank account maintained with an SCSB and specified in the ASBA Form which will be
blocked by such SCSB to the extent of the appropriate Bid Amount in relation to a Bid by
an ASBA Bidder (other than a Bid by an Anchor Investor)
ASBA Bidder Prospective investors (other than Anchor Investors) in the Offer who intend to submit the
Bid through the ASBA process
ASBA Form An application form, whether physical or electronic, used by ASBA Bidders which will be
considered as the application for Allotment in terms of the Red Herring Prospectus and the
Prospectus
Banker(s) to the Offer Escrow Bank(s), Refund Bank (s) and Public Offer Account Bank(s)
Basis of Allotment The basis on which the Equity Shares will be Allotted, as described in “Offer Procedure –
Allotment Procedure and Basis of Allotment” on page 586
Bid An indication to make an offer during the Bid/Offer Period by an ASBA Bidder (other than
an Anchor Investor), or on the Anchor Investor Bidding Date by an Anchor Investor, pursuant
to submission of a Bid cum Application Form, to purchase our Equity Shares at a price within
the Price Band, including all revisions and modifications thereto, to the extent permissible
under the SEBI ICDR Regulations, in terms of the Red Herring Prospectus and the Bid cum
Application Form. The term ‘Bidding’ shall be construed accordingly
Bid Amount In relation to each Bid, the highest value of the optional Bids as indicated in the Bid cum
Application Form and payable by the Anchor Investor or as blocked in the ASBA Account
of the ASBA Bidder, as the case may be, upon submission of the Bid in the Offer
Bid cum Application Form The form in terms of which the Bidder shall make a Bid, including an ASBA Form, and
which shall be considered as the application for the Allotment pursuant to the terms of the
Red Herring Prospectus and the Prospectus
Bid Lot [●] Equity Shares
Bid/Offer Closing Date Except in relation to Anchor Investors, the date after which the Designated Intermediaries
shall not accept any Bids for the Offer, which shall be published in all editions of [●] (a
widely circulated English national daily newspaper), all editions of [●] (a widely circulated
Hindi national daily newspaper) and [●] edition of [●] (a widely circulated Marathi
newspaper, Marathi being the regional language of Maharashtra, where our Registered
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Term Description
Office is located) and in case of any revisions, the extended Bid/Offer Closing Date shall
also be notified on the websites and terminals of the members of the Syndicate, as required
under the SEBI ICDR Regulations. Our Company and the Selling Shareholders, in
consultation with the BRLMs, may decide to close the Bid/Offer Period for QIBs one
Working Day prior to the Bid/Offer Closing Date, subject to the conditions imposed by the
SEBI ICDR Regulations
Bid/Offer Opening Date Except in relation to Bids received from Anchor Investors, the date on which the Designated
Intermediaries shall start accepting Bids for the Offer, which shall be published in all editions
of [●] (a widely circulated English national daily newspaper), all editions of [●] (a widely
circulated Hindi national daily newspaper) and [●] edition of [●] (a widely circulated Marathi
newspaper, Marathi being the regional language of Maharashtra where our Registered
Office is located)
Bid/Offer Period Except in relation to Bids received from Anchor Investors, the period between the Bid/Offer
Opening Date and the Bid/Offer Closing Date, inclusive of both days during which
prospective Bidders (excluding Anchor Investors) can submit their Bids, including any
revisions thereof in accordance with the SEBI ICDR Regulations and the terms of the Red
Herring Prospectus
Bidder/Applicant Any prospective investor who makes a Bid pursuant to the terms of the Red Herring
Prospectus and the Bid cum Application Form and unless otherwise stated or implied,
includes an Anchor Investor
Bidding Centres Centres at which the Designated Intermediaries shall accept the Bid cum Application Forms,
being the Designated Branch for SCSBs, Specified Locations for the Syndicate, Broker
Centres for Registered Brokers, Designated RTA Locations for CRTAs and Designated CDP
Locations for CDPs
Book Building Process The book building process as described in Part A of Schedule XI of the SEBI ICDR
Regulations, in terms of which the Offer Price shall be determined
Book Running Lead Managers/
BRLMs
JM Financial Limited, Credit Suisse Securities (India) Private Limited^, Goldman Sachs
(India) Securities Private Limited, HDFC Bank Limited and Kotak Mahindra Capital
Company Limited are the book running lead managers to the Offer
^In compliance with the proviso to Regulation 21A(1) of the Securities and Exchange Board
of India (Merchant Bankers) Regulations, 1992, as amended, read with proviso to Regulation
5(3) of the SEBI ICDR Regulations, Credit Suisse Securities (India) Private Limited is
involved as a merchant banker only in marketing of the Offer
Broker Centres Broker centres notified by the Stock Exchanges, where Bidders (other than Anchor Investors)
can submit the Bid cum Application Forms to a Registered Broker. The details of such Broker
Centres, along with the names and contact details of the Registered Brokers are available on
the respective websites of the Stock Exchanges, being https://www.bseindia.com/ and
https://www.nseindia.com/, respectively
CAGR Compound annual growth rate calculated as ((ending value / beginning value)^(1 / number
of years) – 1)
CAN/Confirmation of
Allocation Note
Notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who have
been allocated the Equity Shares, after the Anchor Investor Bidding Date
Cap Price Higher end of the Price Band, subject to any revisions thereof, i.e. ` [●] above which the Offer Price and Anchor Investor Offer Price will not be finalised and above which no Bids
will be accepted
Circular on Streamlining of
Public Issues
Circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI
Client ID Client identification number maintained with one of the depositories in relation to the demat
account
Collecting Depository
Participants/CDPs
A depository participant, as defined under the Depositories Act, 1996 and registered under
Section 12(1A) of the SEBI Act and who is eligible to procure Bids at the Designated CDP
Locations in terms of the Circular on Streamlining of Public Issues
Collecting Registrar and Share
Transfer Agents/CRTAs
Registrar and share transfer agents registered with SEBI and eligible to procure Bids at the
Designated RTA Locations in terms of the Circular on Streamlining of Public Issues
Cut-off Price Offer Price as finalised by our Company and the Selling Shareholders, in consultation with
the BRLMs, which may be any price within the Price Band.
Only Retail Individual Investors and Eligible Employees Bidding in the Employee
Reservation Portion are entitled to Bid at the Cut-off Price. QIBs (including Anchor
Investors) and Non-Institutional Investors are not entitled to Bid at the Cut-off Price
Credit Suisse Credit Suisse Securities (India) Private Limited
https://www.bseindia.com/https://www.nseindia.com/
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Term Description
Demographic Details Details of the Bidders including the Bidders’ address, names of the Bidders’ father/husband,
investor status, occupation and bank account details
Designated Branches Such branches of the SCSBs which shall collect the Bid cum Application Forms used by
Bidders (other than Anchor Investors), a list of which is available at the website of the SEBI
(http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes) and updated
from time to time and at such other website as prescribed by SEBI from time to time
Designated CDP Locations Such centres of the Collecting Depository Participants where Bidders (except Anchor
Investors) can submit the Bid cum Application Forms. The details of such Designated CDP
Locations, along with the names and contact details of the CDPs are available on the
respective websites of the Stock Exchanges, being https://www.bseindia.com/ and
https://www.nseindia.com/, respectively and updated from time to time
Designated Date The date on which funds are transferred from the Escrow Account and instructions are given
to the SCSBs to unblock the ASBA Accounts and transfer the amounts blocked by the
SCSBs, from the ASBA Accounts, to the Public Offer Account or the Refund Account, as
applicable, in terms of the Red Herring Prospectus and the aforesaid transfer and instructions
shall be issued only after finalisation of Basis of Allotment in consultation with the
Designated Stock Exchange
Designated Intermediaries Collectively, the members of the Syndicate, sub-syndicate/agents, SCSBs, Registered
Brokers, CDPs and CRTAs, who are authorised to collect Bid cum Application Forms from
the Bidders (other than Anchor Investors), in relation to the Offer
Designated RTA Locations Such centres of the CRTAs where Bidders (except Anchor Investors) can submit the Bid cum
Application Forms. The details of such Designated RTA Locations, along with the names
and contact details of the CRTAs are available on the respective websites of the Stock
Exchanges (www.nseindia.com and www.bseindia.com) and updated from time to time Designated Stock Exchange [●]
Draft Red Herring Prospectus/
DRHP
This draft red herring prospectus dated 27 September 2018, issued in accordance with the
SEBI ICDR Regulations, which does not contain complete particulars of the price at which
our Equity Shares will be Allotted and the size of the Offer, including any addenda or
corrigenda thereto
Eligible Employee A permanent and full-time employee of our Company, (excluding such employees not
eligible to invest in the Offer under applicable laws, rules, regulations and guidelines) as
of the date of filing of the Red Herring Prospectus with the RoC and who continues to be
an employee of our Company until the submission of the Bid cum Application Form, and
is based, working in India as on the date of submission of the Bid cum Application Form.
The maximum Bid Amount under the Employees Reservation Portion by an Eligible
Employee cannot exceed ` 500,000. However, the initial Allotment to an Eligible Employee in the Employee Reservation Portion shall not exceed ₹ 200,000. Only in the event of an under-subscription in the Employee Reservation Portion post the initial
allotment, such unsubscribed portion may be Allotted on a proportionate basis to Eligible
Employees Bidding in the Employee Reservation Portion, for a value in excess of ₹
200,000, subject to the total Allotment to an Eligible Employee not exceeding ₹ 500,000. Eligible NRI A non-resident Indian, resident in a jurisdiction outside India where it is not unlawful to make
an offer or invitation under the Offer and in relation to whom the Red Herring Prospectus
constitutes an invitation to subscribe to the Equity Shares
Employee Reservation Portion The portion of the Offer, being up to 300,000 Equity Shares, aggregating up to ` [●] million, available for allocation to Eligible Employees, on a proportionate basis.
Escrow Account(s) Account(s) opened with Escrow Bank and in whose favour the Anchor Investors will transfer
money through direct credit or NACH or NEFT or RTGS in respect of the Bid Amount when
submitting a Bid
Escrow Agreement Agreement to be entered into among our Company, the Selling Shareholders, the Registrar
to the Offer, the BRLMs and the Banker(s) to the Offer for collection of the Bid Amounts
and where applicable remitting refunds, if any, on the terms and conditions thereof
Escrow Bank A bank, which is a clearing member and registered with SEBI as a banker to an issue and
with whom the Escrow Account will be opened
First Bidder The Bidder whose name appears first in the Bid cum Application Form or the Revision
Form and in case of joint Bids, whose name appears as the first holder of the beneficiary
account held in joint names
Floor Price The lower end of the Price Band, subject to any revisions thereof, at or above which the Offer
Price and the Anchor Investor Offer Price will be finalised and below which no Bids will be
accepted, and which shall not be less than the face value of the Equity Shares
https://www.bseindia.com/https://www.nseindia.com/
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Term Description
General Information Document The General Information Document for investing in public issues prepared and issued in
accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013, notified by
SEBI and updated pursuant to the circular (CIR/CFD/POLICYCELL/11/2015) dated
November 10, 2015, the circular (CIR/CFD/DIL/1/2016) dated January 1, 2016 and
(SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016, notified by SEBI and
included in “Offer Procedure” on page 551
Goldman Goldman Sachs (India) Securities Private Limited
HDFC HDFC Bank Limited
JM Financial JM Financial Limited
Kotak Kotak Mahindra Capital Company Limited
Maximum RII Allottees The maximum number of RIIs who can be Allotted the minimum Bid Lot. This is
computed by dividing the total number of Equity Shares available for Allotment to RIIs by
the minimum Bid Lot
Minimum Promoters’
Contribution
Aggregate of 20% of the fully diluted post- Offer equity share capital of our Company that
are eligible to form part of the minimum promoters’ contribution, as required under the
provisions of the SEBI ICDR Regulations, held by our Promoters that shall be locked-in
for a period of three years from the date of Allotment
Mutual Fund Portion 5% of the Net QIB Portion or 224,546 Equity Shares, which shall be available for allocation
to Mutual Funds only, on a proportionate basis, subject to valid Bids being received at or
above the Offer Price
Net Offer Offer less Employee Reservation Portion
Net QIB Portion The portion of the QIB Portion less the number of Equity Shares Allotted to the Anchor
Investors
Non-Institutional
Investors/NIIs
All Bidders, including Category III FPIs that are not QIBs (including Anchor Investors) or
Retail Individual Investors who have Bid for Equity Shares for an amount of more than ` 200,000 or Eligible Employees Bidding in the Employee Reservation Portion, who have Bid
for Equity Shares for an amount of more than ` 500,000 (but not including NRIs other than Eligible NRIs)
Non-Institutional Portion The portion of the Offer, being not more than 15% of the Net Offer or 2,245,452 Equity
Shares, available for allocation on a proportionate basis to Non-Institutional Investors, subject
to valid Bids being received at or above the Offer Price
Offer Initial public offering of up to 15,269,684 Equity Shares for cash at a price of ̀ [●] per Equity Share aggregating up to ` [●] million, consisting of an Offer for Sale of up to 5,017,868 Equity Shares by Dr. Sushil Kanubhai Shah aggregating up to [●] million and up to
10,251,816 Equity Shares by CA Lotus Investments aggregating up to [●] million. The Offer
includes a reservation of up to 300,000 Equity Shares aggregating up to ` [●] million, for
subscription by Eligible Employees. The Offer and the Net Offer shall constitute [●]% and
[●]%, respectively, of the post-Offer paid-up Equity Share capital of our Company
Offer Agreement The agreement dated September 27, 2018 entered into among our Company, the Selling
Shareholders and the BRLMs, pursuant to which certain arrangements are agreed to in
relation to the Offer
Offer for Sale Offer for sale of up to 5,017,868 Equity Shares by Dr. Sushil Kanubhai Shah aggregating up
to ` [●] million and up to 10,251,816 Equity Shares by CA Lotus Investments aggregating up to ` [●] million, in the Offer
Offer Price The final price at which Equity Shares will be Allotted to the successful Bidders (except
Anchor Investors), as determined in accordance with the Book Building Process and
determined by our Company and the Selling Shareholders, in consultation with the BRLMs,
in terms of the Red Herring Prospectus on the Pricing Date
Offered Shares Up to 15,269,684 Equity Shares aggregating up to ` [●] million, consisting of 5,017,868 Equity Shares offered by the Promoter Selling Shareholder and 10,251,816 Equity Shares
offered by the Investor Selling Shareholders, in the Offer
Price Band Price band of the Floor Price of ` [●] and a Cap Price of ` [●], including any revisions thereof. The Price Band and the minimum Bid Lot size for the Offer will be decided by our
Company and the Selling Shareholders, in consultation with the BRLMs, and shall be
advertised in all editions of [●] (a widely circulated English national daily newspaper), all
editions of [●] (a widely circulated Hindi national daily newspaper) and the [●] edition of [●]
(a widely circulated Marathi newspaper, Marathi being the regional language of
Maharashtra where our Registered Office is located) at least five Working Days prior to the
Bid/Offer Opening Date, with the relevant financial ratios calculated at the Floor Price and
at the Cap Price and shall be made available to the Stock Exchanges for the purpose of
uploading on their websites
Pricing Date The date on which our Company and the Selling Shareholders, in consultation with the
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Term Description
BRLMs, shall finalise the Offer Price
Prospectus The Prospectus to be filed with the RoC in relation to this Offer, on or after the Pricing Date
in accordance with the provisions of Section 26 of the Companies Act, 2013 and the SEBI
ICDR Regulations, containing the Offer Price, the size of the Offer and certain other
information, including any addenda or corrigenda thereto
Public Offer Account The account(s) to be opened with the Public Offer Account Bank under Section 40(3) of the
Companies Act, 2013 to receive monies from the Escrow Account(s) and the ASBA
Accounts on the Designated Date
Public Offer Account Bank The banks with whom the Public Offer Account is opened for collection of Bid Amounts
from Escrow Account and ASBA Account on the Designated Date
QIB Portion The portion of the Offer, being not less than 75% of the Net Offer or 11,227,264 Equity
Shares to be Allotted to QIBs on a proportionate basis, including the Anchor Investor Portion
(in which allocation shall be on a discretionary basis, as determined by our Company and the
Selling Shareholders, in consultation with the BRLMs), subject to valid Bids being received
at or above the Offer Price
Qualified Institutional Buyers/
QIBs
A qualified institutional buyer as defined under Regulation 2(1)(zd) of the SEBI ICDR
Regulations
Red Herring Prospectus/RHP The red herring prospectus to be issued in accordance with Section 32 of the Companies Act,
2013 and the SEBI ICDR Regulations, which will not have complete particulars of the price
at which the Equity Shares shall be Allotted and which shall be filed with the RoC at least
three Working Days before the Bid/Offer Opening Date and will become the Prospectus
after filing with the RoC after the Pricing Date, including any addenda or corrigenda
thereto
Refund Account(s) Account(s) opened with the Refund Bank from which refunds, if any, of the whole or part of
the Bid Amount shall be made to Anchor Investors
Refund Bank(s) The bank(s) with whom the Refund Account(s) will be opened
Registered Brokers Stock brokers registered with SEBI and the stock exchanges having nationwide terminals,
other than the members of the Syndicate and eligible to procure Bids in terms of circular
number CIR/CFD/14/2012 dated October 14, 2012, issued by SEBI
Registrar Agreement The agreement dated September 27, 2018, entered into among our Company, the Selling
Shareholders and the Registrar to the Offer in relation to the responsibilities and obligations
of the Registrar to the Offer pertaining to the Offer
Registrar to the Offer Link Intime India Private Limited
Retail Portion The portion of the Offer, being not more than 10% of the Net Offer or 1,496,968 Equity
Shares, available for allocation to Retail Individual Investors, which shall not be less than the
minimum Bid lot, subject to availability in the Retail Portion
Retail Individual Investors/RIIs Bidders, other than Eligible Employees Bidding in the Employee Reservation Portion, whose
Bid Amount for Equity Shares in the Offer is not more than ` 200,000 in any of the bidding options in the Offer (including HUFs applying through their karta and Eligible NRIs and does
not include NRIs other than Eligible NRIs)
Revision Form The form used by the Bidders to modify the quantity of Equity Shares or the Bid Amount in
any of their Bid cum Application Forms or any previous Revision Form(s), as applicable.
QIBs and Non-Institutional Investors are not permitted to withdraw their Bid(s) or lower the
size of their Bid(s) (in terms of quantity of Equity Shares or the Bid Amount) at any stage
Retail Individual Bidders can revise their Bids during the Bid/Offer Period and withdraw
their Bids until Bid/Offer Closing Date
Self Certified Syndicate Banks/
SCSBs
The banks registered with the SEBI which offer the facility of ASBA and the list of which is
available on the website of the SEBI
(http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes) and updated
from time to time and at such other websites as may be prescribed by SEBI from time to time
Share Escrow Agreement The agreement to be entered into among the Selling Shareholders, our Company and a
share escrow agent in connection with the transfer of the Offered Shares and credit of such
Equity Shares to the demat account of the Allottees
Specified Locations Bidding centres where the Syndicate shall accept Bid cum Application Forms, a list of which
is included in the Bid cum Application Form
Stock Exchanges Collectively, BSE Limited and National Stock Exchange of India Limited
Syndicate Agreement The agreement to be entered into among the members of the Syndicate, our Company and the
Selling Shareholders in relation to the collection of Bid cum Application Forms by the
Syndicate Members (other than Bids directly submitted to the SCSBs under the ASBA
process and Bids submitted to the Registered Brokers at the Broker Centres)
Syndicate Members Intermediaries registered with the SEBI and permitted to carry out activities as an underwriter,
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Term Description
as may be appointed by our Company, in consultation with the BRLMs
Syndicate or members of the
Syndicate
Collectively, the BRLMs and the Syndicate Members
Systemically Important Non-
Banking Financial Company
Systemically important non-banking financial company as defined under Regulation
2(1)(zla) of the SEBI ICDR Regulations, as a non-banking financial company registered
with the Reserve Bank of India and having a net-worth of more than five thousand million
rupees as per the last audited financial statements
Underwriters The underwriters to be appointed in terms of the Underwriting Agreement
Underwriting Agreement The agreement to be entered into among our Company, the Selling Shareholders and the
Underwriters on or after the Pricing Date but prior to filing of the Prospectus
Working Day(s) Any day, other than the second and fourth Saturdays of each calendar month, Sundays and
public holidays, on which commercial banks in Mumbai are open for business, provided
however, with reference to (a) announcement of Price Band; and (b) Bid/Offer Period,
“Working Day” shall mean any day, excluding all Saturdays, Sundays and public holidays,
on which commercial banks in Mumbai are open for business; and (c) period between the
Bid/Offer Closing Date and the listing of the Equity Shares on the Stock Exchanges,
“Working Day” shall mean all trading days of the Stock Exchanges, excluding Sundays
and bank holidays, as per the SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/26 dated
January 21, 2016
Conventional and General Terms and Abbreviations
Term Description
Adjusted EBITDA EBITDA adjusted for non-operating items
AIF(s) Alternative Investment Funds, as defined in, and registered under the SEBI AIF Regulations
AS Accounting standards referred to in the Companies (Accounting Standards) Rules, 2006
issued by the Institute of Chartered Accountants of India
BSE BSE Limited
CAGR Compounded Annual Growth Rate
Category III FPIs FPIs registered as category III FPIs under the SEBI FPI Regulations, which shall include all
other FPIs not eligible under category I and II foreign portfolio investors, such as endowments,
charitable societies, charitable trusts, foundations, corporate bodies, trusts, individuals and
family offices
CCI Competition Commission of India
CDSL Central Depository Services (India) Limited
CEO Chief Executive Officer
CFO Chief Financial Officer
CGST Act, 2017 Central Goods and Services Tax Act, 2017
CIN Corporate Identity Number
Companies Act Companies Act, 1956 (without reference to the provisions thereof that have ceased to have
effect upon notification of the Notified Sections) and the Companies Act, 2013, read with
the rules, regulations, clarifications and modifications thereunder
Companies Act, 1956 Companies Act, 1956 (without reference to the provisions thereof that have ceased to have
effect upon notification of the Notified Sections) and the rules, regulations, modifications
and clarifications made thereunder as the context requires
Companies Act, 2013 Companies Act, 2013, to the extent in force pursuant to the notification of the Notified
Sections, read with the rules, regulations, notifications, clarifications and modifications
thereunder
Competition Act Competition Act, 2002
CPC Code of Civil Procedure, 1908
CSR Corporate Social Responsibility
Demat Dematerialised
Depositories Act The Depositories Act, 1996
Depository A depository registered with the SEBI under the Securities and Exchange Board of India
(Depositories and Participants) Regulations, 1996
DIPP Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, GoI
DP ID Depository Participant’s Identity number
EBITDA Net income before interest expense, other non-operating income or losses, taxes,
depreciation and amortization
Environment Act Environment (Protection) Act, 1986
EPF Act Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
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Term Description
EPS Earnings per share
ESI Act Employees’ State Insurance Act, 1948
ESOP Employee stock option plan
FCNR Account Foreign Currency Non-Resident (Bank) account established in accordance with the FEMA
FDI Foreign direct investment
FDI Policy The consolidated FDI Policy, effective from August 28, 2017, issued by the Department of
Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of
India, and any modifications thereto or substitutions thereof, issued from time to time
FEMA The Foreign Exchange Management Act, 1999 read with rules, regulations, notifications,
circulars and directions thereunder
FEMA Regulations Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside
India) Regulations, 2017
Finance Act Finance Act, 2018
Financial Year/Fiscal/Fiscal
Year
The period of 12 months commencing on April 1 of the immediately preceding calendar
year and ending on March 31 of that particular calendar year
FPIs Foreign Portfolio Investors, as defined and registered with SEBI under SEBI FPI
Regulations
FVCI Foreign venture capital investors as defined and registered with SEBI under the SEBI FVCI
Regulations
GAAR General Anti-Avoidance Rules
GDP Gross Domestic Product
GoI/Central Government/
Indian Government/
Government
The Government of India
GST Goods and services tax
HUF(s) Hindu Undivided Family(ies)
ICAI Institute of Chartered Accountants of India
ICDS Income Computation and Disclosure Standards
IFRS International Financial Reporting Standards
IFSC Indian Financial System Code
Income Tax Act Income Tax Act, 1961
Ind AS Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013, as
notified under Rule 3 of Companies (Indian Accounting Standard) Rules, 2015
Indian GAAP/IGAAP/Previous
GAAP
In accordance with the accounting principles generally accepted in India, including the
Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 read with
Rule 7 of the Companies (Accounts) Rules, 2014
INR/Rupee/` /Rs. Indian Rupee, the official currency of the Republic of India IPO Initial public offering
IRDAI Insurance Regulatory and Development Authority of India
IRDAI Investment Regulations Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016
IT Information Technology
LLP Limited Liability Partnership
MCA Ministry of Corporate Affairs, GoI
Mn Million
MoEF Ministry of Environment, Forest and Climate Change
Mutual Funds Mutual funds registered with the SEBI under the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996
N.A. Not applicable
NCDs Non-convertible debentures
NCLT National Company Law Tribunal
Notified Sections Sections of the Companies Act, 2013 that have been notified by the MCA and are currently
in effect
NR/Non-resident A person resident outside India, as defined under FEMA and includes NRIs, FVCIs and
FPIs
NRI Non-Resident Indian as defined under the FEMA Regulations
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
P/E Ratio Price/Earnings Ratio
PAN Permanent account number
RBI Reserve Bank of India
Regulation S Regulation S under the U.S. Securities Act
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11
Term Description
Rule 144A Rule 144A under the U.S. Securities Act
SCRA Securities Contract (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SE Act Shops and establishment legislations as enacted by various state governments
SEBI Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012
SEBI ESOP Regulations Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,
2014
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations,
2000
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009
SEBI Listing Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015
STT Securities Transaction Tax
Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011
Total Revenue Revenue from operations and other income
Trade Marks Act Trade Marks Act, 1999
U.S. GAAP Generally Accepted Accounting Principles in the United State of America
U.S. QIBs As defined in Rule 144A under the U.S. Securities Act and referred to in this Draft Red
Herring Prospectus as “U.S. QIBs”. For the avoidance of doubt, the term “U.S. QIBs” does
not refer to a category of institutional investor defined under applicable Indian regulations
and referred to in this Draft Red Herring Prospectus as - QIBs
U.S. Securities Act U.S. Securities Act of 1933, as amended
US$/USD/US Dollar United States Dollar, the official currency of the United States of America
USA/U.S./US/United States United States of America, its territories and possessions, any state of the United States of
America and the District of Columbia
VAT Value Added Tax
VCFs Venture capital funds as defined in and registered with the SEBI under the Securities and
Exchange Board of India (Venture Capital Fund) Regulations, 1996 or the SEBI AIF
Regulations, as the case may be
Industry Related Terms
Term Description
AERB Atomic Energy Regulatory Board
APLAC Asia Pacific Laboratory Accreditation Cooperation
ART Centers Antiretroviral Therapy Centers
CAP College of American Pathologists
CT Scan Computed Tomography Scan
CLIA Clinical Laboratory Improvement Amendments
CME Continuing Medical Education Program
CRM Customer Relationship Management
DNA Deoxyribo Nucleic Acid
FDA Food and Drug Administration
FICCI Federation of Indian Chambers of Commerce and Industry
GRL Global Reference Laboratory
HIV Human Immunodeficiency Virus
IATA International Air Transport Association
IMF International Monetary Fund
ILAC International Laboratory Accreditation Cooperation
ISO International Organization for Standardization
KENAS Kenya Accreditation Service
LIMS Laboratory Information Management System
MRI Magnetic Resonance Imaging
NABL National Accreditation Board for Testing and Calibration Laboratories
NACO National Aids Control Organization
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Term Description
PET-CT Positron Emission Tomography–Computed Tomography
PPP Public Private Partnership
RNA Ribo Nucleic Acid
VPN Virtual Private Network
The words and expressions used but not defined in this Draft Red Herring Prospectus will have the same meaning
as assigned to such terms under the Companies Act, the SEBI Act, the SEBI ICDR Regulations, the SCRA, the
Depositories Act and the rules and regulations made thereunder.
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CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND
CURRENCY OF PRESENTATION
Certain Conventions
All references in this Draft Red Herring Prospectus to “India” are to the Republic of India.
Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page
numbers of this Draft Red Herring Prospectus.
Financial Data
Unless stated or the context requires otherwise, the financial information in this Draft Red Herring Prospectus is
derived from our Restated Summary Statements. The Restated Summary Statements for (a) Fiscals 2018, 2017
and 2016 have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting
Standards) Rules, 2015, as amended, read with Section 133 of the Companies Act, 2013 and other relevant
provisions of the Companies Act, 2013, to the extent applicable and (b) Fiscals 2015 and 2014 have been prepared
in accordance with Indian GAAP and Companies Act, 1956, and each have been restated in accordance with the
SEBI ICDR Regulations. For further information, see “Financial Information” on page 203. Certain other financial
information pertaining to our Group Companies is derived from its respective financial statements.
On February 16, 2015, the Ministry of Corporate Affairs issued the Ind AS Rules for the purpose of enacting
changes to Indian GAAP that are intended to align Indian GAAP further with IFRS. In terms of a notification
issued by the Ministry of Corporate Affairs, Government of India read with SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31, 2016, our Company is required to: (i) prepare its financial
statements in accordance with Ind AS for accounting periods beginning on or after April 1, 2017, and (ii) for the
purposes of disclosure in this Draft Red Herring Prospectus, prepare and present our standalone and consolidated
financial statements for the latest three Fiscals (in this case, for Fiscals 2018, 2017 and 2016) under Ind AS and
present our standalone and consolidated financial statements for the earliest two Fiscals (in this case, Fiscals 2015
and 2014) in accordance with Indian GAAP. Accordingly, our financial statements for Fiscals 2018, 2017 and
2016 may not be comparable to our historical financial statements.
The Restated Summary Statements have been compiled from (i) our audited financial statements for the year
ended March 31, 2018 prepared in accordance with Ind AS. Such audited financial statements as at and for the
year ended March 31, 2018 also include the comparative Ind AS financial statements for the year ended March
31, 2017 (ii) audited financial statements as at and for the year ended March 31, 2016 prepared under previous
generally accepted accounting principles (Indian GAAP) adjusted in conformity with Ind AS. The proforma
financial information of our Company (on a standalone and consolidated basis) for the year ended March 31,
2016, has been prepared in accordance with requirements of SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/47
dated March 31, 2016. This proforma Ind AS financial information has been prepared by making Ind AS
adjustments to the audited Indian GAAP financial statements as at and for the year ended March 31, 2016. (iii)
our audited financial statements as at and for the years ended March 31, 2015 and March 31, 2014, prepared under
Indian GAAP.
Our Company’s financial year commences on April 1 of the immediately preceding calendar year and ends on
March 31 of that particular calendar year, so all references to a particular financial year or fiscal are to the 12-
month period commencing on April 1 of the immediately preceding calendar year and ending on March 31 of that
particular calendar year. Unless the context requires otherwise, all references to a year in this Draft Red Herring
Prospectus are to a calendar year and references to a Fiscal/Fiscal Year are to the year ended on March 31, of that
calendar year. Further, the financial statements of all the Subsidiaries considered in the Restated Consolidated
Summary Statements of our Company are drawn up to March 31, 2018 except for Metropolis Bramser Lab
Services (Mtius) Limited, Metropolis Healthcare Ghana Ltd and Metropolis Star Lab Kenya Limited, which are
drawn up to December 31, 2017. The financial statements of Metropolis Bramser Lab Services (Mtius) Limited,
Metropolis Healthcare Ghana Ltd and Metropolis Star Lab Kenya Limited are not adjusted for the period between
December 31, 2017 and the date of the Restated Summary Statements since there were no significant transactions
and events that occurred in this period.
There are significant differences between Ind AS, Indian GAAP, U.S. GAAP and IFRS. Our Company does not
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provide reconciliation of its financial information to IFRS or U.S. GAAP. Our Company has not attempted to
explain those differences or quantify their impact on the financial data included in this Draft Red Herring
Prospectus and it is urged that you consult your own advisors regarding such differences and their impact on our
Company’s financial data. The degree to which the financial information included in this Draft Red Herring
Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with
Indian accounting policies and practices, Indian GAAP, Ind AS, the Companies Act, 2013 and the SEBI ICDR
Regulations. Any reliance by persons not familiar with Indian accounting policies and practices on the financial
disclosures presented in this Draft Red Herring Prospectus should accordingly be limited.
Unless the context otherwise indicates, any amount and percentage, as set forth in “Risk Factors”, “Our Business”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 18, 135
and 492, respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on the basis of
the Restated Consolidated Summary Statements.
Certain figures contained in this Draft Red Herring Prospectus, including financial information in rupees million,
have been subject to rounding adjustments. All decimals have been rounded off to two decimal points other than
the operational numbers which have been rounded off to one decimal point in some instances. In certain instances,
(i) the sum or percentage change of such numbers may not conform exactly to the total figure given; and (ii) the
sum of the numbers in a column or row in certain tables may not conform exactly to the total figure given for that
column or row. Further, any figures sourced from third-party industry sources may be rounded off to other than
two decimal points to conform to their respective sources.
Industry and Market Data
Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus have been obtained
or derived from publicly available information as well as industry publications and sources.
Information has also been included in this Draft Red Herring Prospectus based on the report titled “Indian
Diagnostic Industry Report” dated September 20, 2018, that we have commissioned from Frost & Sullivan (the
“Report”). For details of risks in relation to commissioned reports, see “Risk Factor – We have commissioned
industry report from Frost & Sullivan India Private Limited, which have been used for industry related data in
this Draft Red Herring Prospectus and such data has not been independently verified by us” on page 35.
Industry publications generally state that the information contained in such publications has been obtained from
sources generally believed to be reliable, but their accuracy, completeness and underlying assumptions are not
guaranteed, and their reliability cannot be assured and accordingly, investment decisions should not be on such
information. Although we believe that the industry and market data used in this Draft Red Herring Prospectus is
reliable, it has not been independently verified by us, the Selling Shareholders, the BRLMs or any of our or their
respective affiliates or advisors and none of these parties make any representation as to the accuracy of this
information. The data used in these sources may have been reclassified by us for the purposes of presentation.
Data from these sources may also not be comparable. Industry publications may also base their information on
estimates and assumptions that may prove to be incorrect.
The extent to which the market and industry data presented in this Draft Red Herring Prospectus is meaningful
depends upon the reader’s familiarity with and understanding of the methodologies used in compiling such data.
There are no standard data gathering methodologies in the industry in which the business of our Company is
conducted, and methodologies and assumptions may vary widely among different market and industry sources.
Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various
factors, including those discussed in “Risk Factors” on page 18. Accordingly, investment decisions should not be
based solely on such information.
In accordance with the SEBI ICDR Regulations, the section “Basis for the Offer Price” on page 110 includes
information relating to our peer group companies. Such information has been derived from publicly available
sources, and neither we nor the BRLMs have independently verified such information.
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Currency and Units of Presentation
All references to:
• “Rupees” or “` ” or “INR” or “Rs.” are to Indian Rupee, the official currency of the Republic of India;
• “GBP” or “£” are to Pound Sterling, the official currency of the United Kingdom;
• “USD” or “US$” are to United States Dollar, the official currency of the United States;
• “AED” are to Arab Emirates Dirham, the official currency of the United Arab Emirates;
• “KES” are to Kenyan Shilling, the official currency of the Republic of Kenya;
• “LKR” are to Sri Lankan Rupee, the official currency of the Socialist Republic of Sri Lanka;
• “MUR” are to Mauritian Rupee, the official currency of the Republic of Mauritius;
• “GHS” are to Ghanaian Cedi, the official currency of the Republic of Ghana;
• “UGX” are to Ugandan Shilling, the official currency of the Republic of Uganda; and
• “TZS” are to Tanzanian Shilling, the official currency of the United Republic of Tanzania.
Except otherwise specified, our Company has presented certain numerical information in this Draft Red Herring
Prospectus in “million” units. One million represents 1,000,000 and one billion represents 1,000,000,000.
However, where any figures that may have been sourced from third-party industry sources are expressed in
denominations other than millions, such figures appear in this Draft Red Herring Prospectus expressed in such
denominations as provided in their respective sources.
Exchange Rates
This Draft Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees that
have been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be
construed as a representation that these currency amounts could have been, or can be converted into Indian Rupees,
at any particular rate or at all.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between
the Rupee and other currencies:
(in ` )
Currency As on March 31,
2018#
As on March 31,
2017
As on March 31,
2016
As on March 31,
2015
As on March 31,
2014**
1 USD* 65.04 64.84 66.33 62.59 60.10
1 GBP* 92.28 80.88 95.09 92.46 99.85
1 AED^ 17.65 17.62 17.99 16.99 16.30
1 KES^ 0.64 0.62 0.64 0.66 0.68
1 LKR^ 0.42 0.42 0.44 0.46 0.46
1 MUR^ 1.88 1.77 1.81 1.65 1.93
1 GHS^ 14.65 14.86 17.09 16.38 22.22
1 UGX^ 0.02 0.02 0.02 0.02 0.02
1 TZS^ 0.03 0.03 0.03 0.03 0.04 *Source: RBI Reference Rate ^Source: www.oanda.com #Exchange rate as on March 28, 2018, as RBI Reference Rate is not available for March 29, 2018 and March 30, 2018 being public holiday and March 31, 2018 being a Saturday. **Exchange rate as on March 28, 2014, as RBI Reference Rate is not available for March 31, 2014, March 30, 2014 and March 29, 2014 being
a public holiday, a Sunday and a Saturday, respectively.
http://www.oanda.com/
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FORWAR