SMALLCAP World Fund, Inc. has completely exited its position in Entero Healthcare Solutions Ltd through a substantial disposal of shares on December 29, 2025. The transaction, disclosed under SEBI's Regulation 29(2), represents a complete divestment of the fund's stake in the healthcare company.

Transaction Details

The disposal involved the complete sale of SMALLCAP World Fund's entire shareholding in Entero Healthcare Solutions. The fund sold all 2,277,083 shares it held, representing 5.24% of the company's total share capital.

Share Capital Impact

The transaction occurred against the backdrop of changes in Entero Healthcare Solutions' share capital structure. The company's equity share capital increased from 43,493,767 shares before the transaction to 43,508,907 shares after the disposal, indicating concurrent corporate actions.

Regulatory Compliance

The disclosure was made in accordance with Regulation 29(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. SMALLCAP World Fund confirmed it does not belong to the promoter or promoter group of Entero Healthcare Solutions.

The transaction was executed through net sales in the open market on December 29, 2025. The disclosure was signed by Luxman R. Nathan, Vice President, on behalf of Capital Research and Management Company, which serves as the investment adviser to SMALLCAP World Fund.

Market Presence

Entero Healthcare Solutions Ltd is listed on both the BSE and National Stock Exchange of India. The complete exit by SMALLCAP World Fund represents a significant change in the company's institutional shareholding pattern, with the fund reducing its stake from 5.24% to zero in a single transaction.

Entero Healthcare Solutions , a leading healthcare distribution company, has reported a robust quarterly performance with significant revenue growth and margin expansion. The company has also unveiled an ambitious acquisition strategy focused on the MedTech sector.

Financial Highlights

• Revenue grew by 20.8% year-on-year to INR 1,571.00 crores in the latest quarter
• EBITDA margins expanded to 4.00%
• Organic growth stood at 13.40% year-on-year, outpacing the Indian Pharmaceutical Market (IPM) growth rate of 7.30%

Acquisition Strategy

Entero Healthcare has announced plans to complete seven MedTech acquisitions worth INR 1,000.00 crores in proforma revenues. This strategic move is expected to boost the company's financial profile:

• Gross margins are anticipated to improve by 70-90 basis points
• EBITDA margins are projected to increase by 50-75 basis points
• 60% of M&A activity is focused on the higher-margin MedTech segment

MedTech Focus

The company's increased focus on the MedTech sector is driven by several factors:

• MedTech distributors typically enjoy EBITDA margins of 10.00% or higher
• The MedTech segment is growing faster than the traditional pharmaceutical distribution business
• Entero's representation in MedTech is expected to reach 14-15% of its overall business post-consolidation

Working Capital Management

Entero Healthcare has made significant strides in optimizing its working capital:

• Net working capital days improved from 69 days a year ago to 63 days in the current quarter
• The company aims to further reduce working capital days to around 60 by the end of the fiscal year
• These improvements are expected to generate positive operating cash flow of over INR 100.00 crores for the year

Future Outlook

Entero Healthcare remains confident about its growth trajectory and margin expansion. The company expects:

• To close FY26 with EBITDA margins above 4.00%
• Post-acquisition EBITDA margins to potentially reach 4.50% to 4.75%
• Continued focus on increasing wallet share within existing customers
• Expansion into higher-margin product categories

The company's strategic moves in the MedTech sector, coupled with its strong organic growth and improved operational efficiency, position Entero Healthcare for continued success in the evolving healthcare distribution landscape.

Financial Performance Overview