Ascent Meditech Ltd., a leading player in Orthopedic Soft Goods (OSG), healthcare related mobility, wound-care and healthcare products, has finalised plans to expand capacity four times, to cater to growing demand from domestic and international markets.

Wider distribution

The company is also planning for wider distribution penetration in domestic and exports markets.

Ascent Meditech, which markets its products under the Flamingo brand, has raised growth capital of ₹70 crore from the U.K.-based Private Equity player LeapFrog to build a modern manufacturing facility in Daman, a top company executive said.

“For 27 years, we have been funding our growth through internal accruals and this is the first time that we have taken growth capital from PE. It is also a first-such PE placement deal in the Indian OSG market segment. We will use the money in capacity expansion,” Rajiv Mistry, MD, Ascent Meditech, said. The OSG industry in India is estimated to be worth ₹2,000 crore growing at 15-18% per annum. The organised market is only around ₹500 crore but growing in double digits.

Currently, Ascent Meditech has five manufacturing units in Silvassa spread over 2 lakh sq. ft., with an output of 40,000 units per day. The company has now bought 15 acres of land to set up the new facility. This would spread across 1 million sq.ft. and increase the per day unit manufacturing by four to five times (160,000-200,000 units per day).

“This will be the biggest facility in Asia for OSG-pain-wound-trauma management products,” Mr. Mistry said.

“We hope to create jobs and increase our employee count to 5,000 from 1,450 at present,” he said.

Mr. Mistry started the company in the early 1990s with just four people and an initial borrowed capital of ₹50,000.

The company, which posted a revenue of ₹5 lakh in its first year, is expected to close FY19 with a topline of ₹140 crore.

It has posted a CAGR of 38% in revenues since inception and the EBITDA has been growing at a CAGR of 17%. OSG products account for 65% of the company’s revenues.

Lifestyle related problems, higher aspirations and sedentary lifestyle of millennials and Gen-Z is fueling the demand for orthopedic soft goods, pain management, trauma care and wound care management products, Mr. Mistry said.

The company will soon foray into sports, fitness and mobility products in a big way, he said.

Today the company has over 350 products under its flagship Flamingo brand.