Neuberg Diagnostics reportedly in talks with 360One and M&G Investments for $100 million in pre-IPO funding

Diagnostics chain Neuberg Diagnostics is in talks with a consortium of investors, including funds managed by 360One and foreign investor M&G Investments, to raise up to $100 million, Moneycontrol reported on Monday, citing people familiar with the matter.

The news portal previously reported that the company had appointed investment bank o3 Capital to help Neuberger raise funds from private investors.

The company will reportedly use the proceeds from this round to strengthen its mergers and acquisitions (M&A) plans ahead of its initial public offering (IPO) to become one of the largest diagnostic chains in India before venturing into Dalal Street next year. The company is backed by promoter GSK Velu, which was previously an investor in diagnostic chain Metropolis Healthcare.

GSK Velu reportedly sold its 36.5% stake in Metropolis Healthcare to private investor Carlyle in 2015. The promoter also holds stake in Trivitron Healthcare and is an investor in Tamil Nadu-focused hospital chain Kauvery Hospital.

A fund managed by 360One invested nearly $70 million in Kauvery Hospital in March 2023. In June 2024, TI Clean Mobility, a three-wheeled electric vehicle manufacturer under the Murugappa Group, announced that it would raise ₹Of this, Rs 310 crore came from M&G Investments, the report said.

According to the report, in 2023, M&G also announced that it would invest US$75 million in the Vivriti India Retail Asset Fund, which aims to expand and improve financing channels for the underserved small and medium-sized enterprise (SME) sector and millions of low-income households in India, with a focus on women-owned SMEs.

Neuberg is reportedly one of the leading diagnostic service providers in India, with operations not only in India but also in the United Arab Emirates, South Africa and the United States.

The clinic has 5,000 pathology tests and offers a number of health screenings, including ₹1,000 and ₹8,500. The organization reportedly conducts more than 20 million tests annually in 33 laboratories in India and abroad.

The company, which is preparing for its planned initial public offering, reportedly merged its Ahmedabad-based Neuberg Supratech Reference Laboratories and Bengaluru-based Neuberg Anand Reference Laboratories with the parent company last year to streamline operations.

The company has also entered into a 50:50 joint venture (JV) with Kolkata-based diagnostics chain Pulse Diagnostics to expand its presence in East India.

Diagnostics Transactions:

Major M&A transactions in the diagnostics space include Dr Lal PathLabs’ acquisition of Suburban Diagnostics in 2021 in an all-cash transaction for an enterprise value of ₹925 crores.

West Bengal-based Suraksha Diagnostic Pvt Ltd has filed a draft prospectus with the Securities and Exchange Board of India, looking to raise close to $100 million through an IPO. The chain’s private investor OrbiMed is reportedly looking to sell a majority of its stake through a public offering.