Baring shelves plans to list CitiusTech through SPAC

Forum Gandhi | | Updated on: Aug 15, 2021
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Baring acquired a stake in the Mumbai-based healthcare tech company CitiusTech in 2019 for over $1 billion

Private equity firm Baring Asia has shelved plans for a US listing of healthcare consultancy firm CitiusTech through the Special Purpose Acquisition Company (SPAC) route.

Instead, the PE firm may now consider a traditional listing or an Initial Public Offering for the health tech company based in Mumbai, according to sources.

A SPAC is an empty corporate shell that raises money from investors with the aim of acquiring private businesses by merging them. Also known as blank-cheque companies, SPACs have no operations or business plans when they seek investor money.

CitiusTech provides healthcare technology services and solutions to hospitals, insurance, pharma, life sciences, and medical technology companies along with areas of digital technology, such as cloud computing, predictive analytics, and data science.

Baring acquired a stake in the Mumbai-based healthcare tech company CitiusTech in 2019 for over $1 billion.

‘Tough environment’

However, according to sources, it was becoming extremely difficult for companies to list through the SPAC model “There have been multiple Indian companies who have tried listing via a SPAC, however, the norms are too stringent and the paperwork is painstaking. It seems, even Baring has failed listing via a SPAC, hence, the traditional listing may be on cards for CitiusTech.”

CitiusTech and Baring Asia did not respond to query.

Several start-ups like Paytm, Nykaa and Policy Bazaar have tried this route but have not gone through with it. BusinessLine had recently reported that online grocery firm Grofers has also shelved its plan to go public through a SPAC in the US. One of the few Indian companies which continue to pursue this route is Renew Power through a merger agreement with RMG Acquisition Corp. II (RMG II), a Nasdaq-listed special purpose acquisition company. But the official approval from US Securities Exchange Commission is yet to come.

‘Losing pace’

According to Refinitiv, provider of financial market data, SPAC IPOs hit record highs during the start of this year, but the pace of new SPAC listings witnessed a sharp decline in April after witnessing the strongest monthly totals during the first quarter of 2021. March saw 115 SPAC listings globally worth $36.2 billion in proceeds. April totals saw only 18 SPAC IPOs, raising $4 billion, an 88.7 per cent decline in proceeds, and down 84 per cent in the number of new listings from activity in March.

Published on August 15, 2021

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