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Govt floats Global Invitation for EoI to divest 100% equity in HLL

Gireesh Babu, New Delhi
Saturday, December 18, 2021, 08:00 Hrs  [IST]

HLL Lifecare Ltd (HLL), a Miniratna enterprise under the ministry of health and family welfare (MoHFW), has shown a growth from loss to profit in the last five years, according to the company’s balance sheet.  The Government of India has now floated a global invitation for Expression of Interest (EoI) to disinvest its 100 per cent equity shares in the company.
 
The Government of India this week has floated a global invitation and Preliminary Information Memorandum (PIM) for submission of EoI for strategic disinvestment of HLL. The Government of India, acting through Department of Investment and Public Asset Management (DIPAM) has given ‘in-principle’ approval for the strategic disinvestment of HLL by way of the transfer of management control and sale of 100% equity share capital in HLL held by the President of India through MoHFW, including ownership interests in identified subsidiaries and associates held by the Government of India.

It has appointed PricewaterhouseCoopers Private Limited as its exclusive Transaction Advisor (TA) to advise and manage the Proposed Transaction.

According to the income statement of the company, HLL has registered a loss of Rs. 17.07 crore in the year 2016-17, which has grown to Rs. 62.42 crore in the next fiscal year. However, the company started showing profits from 2018-19, starting from Rs. 18.56 crore in 2018-19, which grew to Rs. 109.69 crore in 2019-20 before showing a decline to Rs. 90.77 crore during the year 2020-21.

The revenue from operations has registered almost a fourfold growth from Rs. 1,160.8 crore in 2016-17 to Rs. 5,375.32 crore in the fiscal year 2020-21. The earnings before interest, taxes, depreciation, and amortization (EBITDA) also grew from Rs. 40.44 crore to Rs. 172.21 crore during this period, though the margin saw a decline from 3.5 per cent to 3.2 per cent after registering a growth to 6.4 per cent and 9.4 per cent in the year 2018-19 and 2019-20 respectively.

It has room to increase production considering that most of its products including condoms (67% capacity utilisation during FY 21), Blood bags (39%), Suture (14%), Steroidal OCP (71%), sanitary napkin (54%) and diagnostic test kits (61%). However, the capacity utilisation for its copper-T (145%) and non-steroidal oral contraceptive pill (OCP) (484%) are higher.

“The GoI envisages the strategic disinvestment of HLL as a whole rather than separately in parts, where Interested Bidders can bid individually or in consortium. On completion of the transaction as well as the stipulated lock-in period, flexibility would be given to the strategic acquirer for an easy exit from a part of business which is not in sync with the business plans of the acquirer. The condition of the lock-in period of entire shareholding in the Company, requirements regarding lock-in of equity, continuity of business, staff service conditions, etc. will be clarified at Stage II – RFP stage of the Bid Process,” said the Preliminary Information Memorandum.

HLL is currently a Central Public Sector Enterprises under the administrative control of the MoHFW, and was incorporated in the year 1966 under Companies Act, 1956, and is fully owned by GoI. It was converted into a Public Limited Company with effect from February 21, 2012.

The company is involved in manufacturing and marketing of a range of contraceptives, women’s healthcare products, hospital supplies as well as other pharmaceutical products. HLL is also engaged in providing healthcare and diagnostic services, consultancy and contract services for healthcare infrastructure projects and consultancy services for procurement of medical equipment and devices in the healthcare sector and caters to both domestic and international markets.

The company has two 100 per cent subsidiaries - HLL Infra Tech Services Ltd and HLL Mother & Child Care Hospitals Ltd, a 74 per cent subsidiary Goa Antibiotics & Pharmaceuticals and a 50 per cent joint venture Lifespring Hospitals (P) Ltd with Acument Fund Inc, US for operating maternity care hospitals. The JV is presently running units in 10 hospitals in Hyderabad and Secunderabad. It also has associates including Hindustan Latex Family Planning Promotion Trust, HLL Management Academy and Pratheeksha Charitable Society.

HLL, through its subsidiaries, associates, and JV, has a strong domestic distribution network covering about 1.5 lakh retail outlets across major cities and over 1 lakh remote villages. Internationally, its products are exported to over 85 countries and are also provided to global public health programmes managed by international agencies. The company currently employs 3,905 people across its manufacturing facilities, business and marketing divisions and its corporate offices.

As of March 31, 2021, HLL’s authorised capital was Rs. 300 crore divided into 30 crore equity shares of Rs 10 each and its paid-up share capital was Rs. 15.53 crore held by the President of India through MoHFW, aggregating to 100% of the entire paid-up share capital in HLL.

HLL has brands including Moods, the second largest male condom brand in the country, apart from the male condoms Ustad and Raksha; Saheli, the first non-steroidal OCP in the world, marketed since 1991; Velvet the first indigenously produced female condom brand in India; Crezendo, the first condom with a vibrator ring in India; Novex a non-steroidal oral contraceptive pills; Nogestol and Arpan for steroidal OCPs; and HLL Haemopack and Donato for blood transfusion services equipment.

HITES has an order book of more than Rs.18,000 crore of projects across construction, facilities management, and hospital procurement as of October 2021.

The last date for invitation of queries through email is on January 4, 2022 and the last date for release of response to queries is January 18, 2022. The last date of submission of EoIs is 3 pm on January 31, 2022, and the intimation to the qualified interested bidders is February 14, 2022.

 

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