Morgan Stanley May Exit Sahajanand Medical Technologies, Raising Concerns for India’s Stent Market Leader

Surat : In a major setback for Surat-based Sahajanand Medical Technologies (SMT), India’s leading drug-eluting stent manufacturer, private equity giant Morgan Stanley Private Equity Asia is reportedly planning to sell its entire 17% stake in the company. This comes just five years after their initial investment, raising questions about SMT’s future prospects.

According to a March 7th report in the Economic Times, Morgan Stanley acquired its stake in SMT for Rs 160 crore in 2018 and is reportedly planning to sell its entire 17% stake in the company.

Other key investors include Kotak Pre-IPO Opportunities Funds (6%) and the promoters themselves (45%). Founded in 2001 with the aim of making life-saving medical devices affordable, SMT quickly rose to become the market leader in India’s Rs 1300 crore coronary stent market, which is currently experiencing a 12% annual growth rate.

This news follows another blow for SMT – the alleged suspension of their revolutionary ‘Supraflex’ cardiac stent’s CE certification by European regulators. This suspension effectively bars SMT from selling the product in the lucrative European market, leading to significant potential losses.

Morgan Stanley’s decision has sent shockwaves through the Indian medical device industry, particularly the cardiac stent market. Reports suggest that Dhirajlal Kotadia, SMT’s founder, and his family might also offload a 15-20% stake, adding to the uncertainty. Notably, SMT’s plans for a Rs 1,500 crore IPO in 2022 were also put on hold for undisclosed reasons, according to ET report.

The market itself is segmented into drug-eluting stents, bare-metal stents, bioresorbable vascular scaffolds, and drug-eluting balloons. Following a price cap imposed by the National Pharmaceutical Pricing Authority (NPPA) in 2017, which slashed stent prices by up to 85%, many major Indian manufacturers have shifted their focus towards exports. However, this price cap also discouraged multinationals like Abbott, Boston Scientific Corp, and Medtronic from introducing their new generation stents in the Indian market.

“With both Morgan Stanley’s exit and the European setback, SMT faces a critical juncture. Whether the company can weather these storms and regain investor confidence remains to be seen. The future of India’s stent market leader now hangs in the balance” said an industry expert.