RIL evaluating potential buys in diagnostics segment

The Mukesh Ambani-owned retailer is looking for a player with a pan-India presence, sources said [View in browser]( [See all newsletters]( 13 May 2024 RIL evaluating potential buys in diagnostics segment [Reliance]( Ventures is planning a determined push into the $150 billion diagnostic healthcare segment with the acquisition of a majority stake in a pure-play diagnostic services company, with a cheque size in the range of ₹1000-3000 crore, sources said. The [Mukesh Ambani]( retailer is looking for a player with a pan-India presence, sources said. The RIL subsidiary has online pharmacy Netmeds in its portfolio, which also offers pathology services through its tie-ups with companies such as Thyrocare, Healthians and a few others. The intent now is to have its own diagnostic company with a large network of physical laboratories across the country offering a range of services and scale that up, people aware of developments said. - Also read: [Reliance Capital acquisition: Hinduja Group’s IIHL gets IRDAI approval]( The company is understood to be actively evaluating opportunities in the segment and a deal is likely in the medium term, depending on due diligence and the valuations. RIL did not respond to an email seeking clarification on its proposed plans. Reliance Retail had acquired a majority stake in Netmeds in 2020 for ₹620 crore. It opened the first offline store in January 2023 and now has over 1000 outlets. For the retailer, whose revenues crossed ₹3 lakh crore (over $36 billion) in FY24, growth has come in leaps and bounds through acquisitions. While indications are that the pace of acquisitions will slow down as it consolidates its portfolio and operations, it will be still making strategic purchases to augment its offerings. Healthcare services is one of the areas where it is looking to expand. Over the last three years, the highly fragmented diagnostic sector, which is less than 10 per cent of the healthcare industry, has seen consolidation as larger companies have acquired smaller regional, niche players. During the Covid years, industry leader Dr Lal Path Labs acquired Suburban Diagnostics at an enterprise value of ₹925-1150 crore, online pharmacy startup Pharmeasy acquired a major stake in Thyrocare for ₹4546 crore and Metropolis acquired Dr Ganesan’s Hitech Diagnostic Centre for ₹636 crore. - Also read: [A decade of transformation and self reliance in defence]( Diagnostic chains such as Metropolis and the others have only 18 per cent of the total market, which is dominated by standalone centres, followed by hospital labs. According to a note on the sector by Emkay Research, the top four players in segment have only a minuscule 6 per cent of the total market share. Regional players dominate the segment. Valuations in the segment that had soared during the COVID-19 pandemic, have now become tempered, said Emkay. While there is competitive intensity in the sector, the stress laid on preventive healthcare and greater awareness among the public on the importance of periodic health checks provides significant growth opportunity for national chains. You Might Also Like [Draft project finance norms: Finmin may soon take up infra lenders’ concerns with RBI]( [Economy]( [Draft project finance norms: Finmin may soon take up infra lenders’ concerns with RBI]( [Kashmir chooses ballot over boycott]( [Elections 2024]( [Kashmir chooses ballot over boycott]( [Despite high prices, gold demand picks up this Akshaya Tritiya]( [Gold & Silver]( [Despite high prices, gold demand picks up this Akshaya Tritiya]( [Why it is rewarding to persist with liquid and money market funds]( [Portfolio]( [Why it is rewarding to persist with liquid and money market funds]( Stay informed Subscribe to businessline to stay up-to-date with in-depth business news from India [arrow]( Copyright @ 2024, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please try [here]( Manage your newsletter subscription preferences [here]( If you do not wish to receive such emails go [here](