Mfine approves share buyback program; founders to get a partial exit

On-demand healthcare services startup Mfine has passed a special resolution approving the buyback of shares to provide an exit to its investors, regulatory filings show.

The buyback will be of 1,17,194 class A equity shares and 53,077 Series A1 CCPS. Mfine’s co-founders Ashutosh Lawania and Prasad Kompalli have tendered their 1 lakh equity shares (50K each) for the buyback.

The company will spend upto Rs 18.23 crore to facilitate the buyback of these shares, which constitute 13.2% of the total paid up equity share capital and free reserves of the company. 

“The buyback program is aimed to provide an exit to investors who are desirous of doing so, leading to reduction of outstanding share capital. Further, the program will rationalise the capital structure, optimize returns and enhance the overall shareholder value,” said the regulatory filings.

The approval for the buyback from founders has come within a month of allotment of 175,686 class B equity shares to Lawania and Kompalli as bonus shares in the last week of August. It’s worth noting that the company is buying only class A shares in this buyback program.

Lawania is a second term entrepreneur and previously co-founded India’s biggest fashion e-commerce company Myntra. In 2014, Flipkart acquired Myntra in a Rs 2,000 crore deal. Kompalli was a senior executive at Myntra and served the company in the capacity of chief business officer or CBO.

Mfine offers professional diagnostics and health check-up services. Unlike aggregating individual doctors on the platform, the company partners with top hospitals and runs an online consultation app. As people have been avoiding going to hospitals due to the fear of contracting with the coronavirus, telemedicine services are much in demand.

Mfine had claimed an 8X rise in demand from states with a lower doctor-to-patient ratio in India between mid-March and June. The platform has over 500 hospitals with 3000 doctors of which 250 hospitals were added in the last 3 months. It claims to process 300,000 transactions every month.

As of now, Mfine has raised $34 million across two institutional rounds from SBI Investment, BEENEXT, Stellaris Venture Partners and Prime Venture Partners. Last month, it topped up its Series B round with Rs 39.55 crore infusion from Caretech Pte Inc, an entity owned by Mfine’s co-founders and others.