<article>In a bid to unlock more value from its diagnostics business <a style="color: #000080;" href="http://dealstreetasia.com/tag/srl">SRL</a>, <a style="color: #000080;" href="http://dealstreetasia.com/tag/fortis">Fortis Healthcare</a> plans to demerge the business.</article>

In a bid to unlock more value from its diagnostics business <a style="color: #000080;" href="http://dealstreetasia.com/tag/srl">SRL</a>, <a style="color: #000080;" href="http://dealstreetasia.com/tag/fortis">Fortis Healthcare</a> plans to demerge the business.
&#8220;The board has decided to assess and evaluate the demerger of the diagnostics business of the company,&#8221; the company said in its latest presentation to investors.  &#8220;In addition to the demerger, it will also explore other options that may be available to unlock and monetise value inherent in the diagnostics business,&#8221; it added.
To give exit to some of the private equity firms &#8211; <a style="color: #000080;" href="http://dealstreetasia.com/tag/ifc">International Finance Corporation</a>, NYLIM Jacob Ballas and Avigo Capital Partners, SRL Diagnostics had appointed Moelis &amp; Co as advisor to facilitate the transaction in 2015.
According to recent reports, the private equity investors have revised their plans to sell their combined 34 per cent stake in the company to a large private equity fund. Now, each of the investors will start looking for secondary transactions, selling their stake to another PE fund.
The plan to sell the diagnostic business to large funds has been hitting roadblocks, as the promoters were not willing to cede control of the business, while the buyout funds were not keen on picking up minority stake in the country&#8217;s largest diagnostic chain.
Fortis Healthcare Ltd, controlled by brothers Malvinder Singh and Shivinder Singh, holds about 57% in SRL Diagnostics.
There is also talk about the company exploring other options including an initial public offering or a buyback by promoters.
In December last year, SRL&#8217;s competitor <a style="color: #000080;" href="http://dealstreetasia.com/tag/lal-pathlabs">Dr Lal PathLabs</a> Ltd had successfully listed on the stock exchanges, leading to an increase in valuation of other firms in this field. Dr Lal Pathlabs, which offered shares in its IPO at Rs 550 per share, listed at a 31 per cent premium at Rs.720 in December. Private equity funds WestBridge Capital and TA Associates had partly exited their investments in the company through the IPO.
Also the latest Rs 480 crore-IPO of <a style="color: #000080;" href="http://dealstreetasia.com/tag/thyrocare">Thyrocare</a>, another competitor of SRL, was oversubscribed 75 times and the shares listed on 9 May at Rs 665&#8211; a 49% premium to the issue price of Rs 446.
SRL investors have been looking at a valuation of around Rs 4,000 crore, which according to some of the potential investors was high.
Also Read:
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/private-equity-investors-revise-plans-for-stake-sale-in-srl-diagnostics-42015/">India: Private equity investors revise plans for stake sale in SRL Diagnostics</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/31268-31268/">India: Baring Asia, other PEs in talks to buy stake in SRL Diagnostics</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/31268-31268/">India: Baring Asia, other PEs in talks to buy stake in SRL Diagnostics</a>
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In a bid to unlock more value from its diagnostics business SRL, Fortis Healthcare plans to demerge the business. 

India: Fortis Healthcare to demerge diagnostics arm SRL to unlock more value

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India: Fortis Healthcare to demerge diagnostics arm SRL to unlock more value

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