Promoters of Appasamy Associates plan to sell a controlling stake in the Chennai-based medical equipment manufacturing company, and are in initial talks with private equity investors, two people aware of the development told ET. The potential sale is likely to value the company at ₹1,800-2,000 crore.

Investment bank Edelweiss Finance has been hired for the sale process. Names of the potential PE investors could not be ascertained yet.

The recent death of founder promoter Kasthuri N Ravilla has prompted the second-generation members to offload the majority stake and professionalise the family business. Even if the stake is sold, the existing promoter family will continue to hold a minority stake, said sources.

Appasamy Associates, which is nearly five decades old, has been a leading manufacturer and distributor of ophthalmic equipment, microscopes, lasers, intraocular lens (IOL) and microsurgical instruments. The company is the exclusive distributor for Canon’s medical equipment in India.

Appasamy Associates is expected to post revenue of ₹500 crore with an Ebitda of ₹130 crore in FY23, said sources.

When contacted, Arvind Kasthuri, executive director at Appasamy Associates, declined to comment.

Appasamy Associates had begun operations in 1978 by introducing India’s first low-cost cryo surgical equipment for ophthalmology for ₹1,800, whereas an equivalent imported unit costs ₹20,000. The largest selling global cataract lens brands in India are Johnson & Johnson, Bausch & Lomb, Zeiss, Rayner, Hoya and Alcon, while the popular Indian brands are Appasamy, Aurolab and IoCare.Among the Indian brands, Appasamy is the leader with about 75% market share.

India is one of the largest eye-care markets by volume, where 6.5 million plus people undergo cataract surgery every year. The Centre plans to clear the backlog of cataract surgeries – pending since the Covid outbreak – by increasing the number of surgeries to a total of 27 million in the next three years.

According to reports, the global cataract-lens market is expected to touch $8 billion in the next 5 years.

The Indian medical devices industry is among the sought-after investment destinations for private equity investors. Apax Partners had acquired Healthium, a medtech company focused on products used in surgical, post-surgical, and chronic care, for $350 million in 2018. Last year, Warburg Pincus invested $210 million for a minority stake in Micro Life Sciences, the parent organisation of Meril group of companies, India’s largest medical devices company.

The current market size of the medical devices industry in India is estimated at $11 billion and it is poised for significant growth with the market size expected to reach $50 billion by 2030, according to Investindia.