| Lifecell International Private Limited | ||||
| Rating reaffirmed at 'CRISIL BBB- / Stable' | ||||
| Rating Action | ||||
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| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed the rating on the bank facilities of Lifecell International Private Limited (Lifecell) at ‘CRISIL BBB-/Stable’.
The rating reflects strong market position in stem cell banking industry with first mover advantage and comfortable cash flow from operations. However, these rating strengths are partially offset by absence of adequate awareness on the service and presence of competition from other smaller and regional players |
Key Rating Drivers & Detailed Description Strengths Strong market position in stem cell banking industry coupled with steady growth in diagnostics segment: The company has the first mover advantage, in India, in stem cell segment with commencement of operations from 2004, through a technology tie-up with Cryocell International Inc., when the concept of stem cell banking was in a very nascent stage. Lifecell was able to build its domestic marketing network and necessary infrastructure, resulting in a strong market position. Leveraging on this, the company commenced its offerings in diagnostics, over the past 4 years. These include screening new born and pregnant women for several genetic conditions resulting in a strong growth - from ~Rs 34 crore in fiscal 2019 to around Rs 70 crore in fiscal 2021. New product offerings around fertility and biologics should further strengthen the market position of the company, over the medium term.
Comfortable cash flow from operations: Lifecell's business model results in advance receipt of storage fees from customers, resulting in low reliance on bank debt for its operations. Despite challenges from Covid-19 led disruptions, the company has reported an increase in cash flow from operations (CFO) to Rs 67 crore for fiscal 2021.
Absence of adequate awareness on service offerings: Although Lifecell has moderate scale of operations, reflected in revenues of about Rs.231 crore for fiscal 2021, it is constrained by flat revenues in the stem cell division. The division’s revenues have remained between Rs 130-160 crore in the past three fiscals. In fiscal 2021, the revenues from the stem cell segment reduced to around Rs.136 crore from 166 crore for fiscal 2020; due to lower enrollments largely on account of covid-19 led lockdown restrictions and other disruptions. Further, the stem cell business remains effected by absence of adequate awareness on the services. Community banking continues to remain a relatively new concept in India. As a result, the company’s scale of expansion has largely remained in the metros and Tier-1 cities. Overall, the growth in stem cell business (around 60% contribution to overall revenues) remains a key rating monitorable.
Presence of competition from other small players: On account of the company being a first mover in stem cell segment, it has created a dominant position in the domestic market. Nevertheless, there remains other small players with localized and pockets of influence in few geographies. Lifecell’s ability to maintain its market share and expand in new geographies need to be monitored. |
Liquidity~ Adequate Lifecell’s liquidity remains adequate, with steady cash flow from operations and private equity funding which can support the incremental business requirements in the medium term. Lifecell relies largely on advance receipt of fees from its customers and internal funds to meet its working capital requirements. Lifecell’s liquidity is marked by increasing cash flow from operations of around Rs.60-70 crore over the medium term, which is expected to support the liquidity. Further, the company has received private equity funding of Rs.225 crore from Orbimed Asia Partners to garner growth across its different segments. In addition to the private equity funding, the existing founders of LifeCell shall also participate by investing Rs. 30 crore. Term loans of Rs.66 crore which was outstanding as on March 31, 2020 have completely been repaid in fiscal 2021 with the proceeds of the sale of shares which the company had invested in Strides Pharma Science Limited |
Outlook Stable CRISIL Ratings expects Lifecell to benefit from its healthy market position in the stem cell banking segment and steady growth in its diagnostics business, resulting in increasing cash flow from operations |
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About the Company Incorporated in 2004, Lifecell is a leading provider of services under stem cell banking, diagnostic & therapeutic solutions. Under the stem cell banking, the company collects, processes and stores the umbillical cord blood stem cell. In the diagnostics and therapeutic segment, Lifecell offers a wide range of products and services pertaining to mother and baby associated from pregnancy to childbirth. Further, the company is expanding its biologics offerings and other new products in the domestic market. The company has its storage facilities located in Chennai (Tamil Nadu) and Gurugram (Haryana). Lifecell is promoted by Mr. Mayur Abhaya, along with his family members
The company has processed and stored over 3.6 lakh units of cord blood as on 31 March, 2021 and has tied up with over 3000 hospitals for offerings its range of services. Lifecell has built a sizable high end reproductive diagnostics business in the last few years. In addition to its central reference lab at Chennai, it has set up regional labs in major cities to expand its national footprint. |
Key Financial Indicators
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Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL Ratings' complexity levels are assigned to various types of financial instruments. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
Annexure - Details of Instrument(s)
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||
| Facility | Amount (Rs.Crore) | Rating |
| Proposed Term Loan | 100 | CRISIL BBB-/Stable |
Criteria Details
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