The second-largest pharmacy distributor in India, MedPlus said that it had received SEBI’s approval regarding its initial public offer. The company aims to raise around Rs. 1,638.71 crores.
This Hyderabad-based pharmacy retailer had filed the DRHP with the market regulator earlier in August 2021.
Here are more details on this IPO.
MedPlus IPO – A Quick Glance
Here are the key highlights about the upcoming public offer of MedPlus:
- The initial public offering of MedPlus will consist of fresh equity share issuance worth Rs. 600 crores and an offer for sale of around Rs. 1,038.71. The company’s existing shareholders and promoters will participate in the OFS.
- In the offer for sale, two early shareholders of MedPlus will be significant sellers. Lone Furrow Investments will divest shares worth Rs. 450 crores and PI Opportunities Fund – I will sell equity shares amounting to around Rs. 500 crores. In addition, other shareholders and entities will also sell shares worth nearly Rs. 88.71 crores.
The company plans to utilise the net proceeds from this IPO to:
- Fund the necessary working capital requirements, and
- General corporate purposes
Additionally, this initial share sale will also contain a reservation for employees.
MedPlus is the second-largest pharmacy retail chain in India based on its revenue from operations in FY21. The company extends a vast product portfolio, including medicines, wellness products, pharmaceuticals, test kits and medical devices.
In addition to these, MedPlus also offers fast-moving consumer goods (FMCGs), such as toiletries, personal care products, baby care products, soaps, and more. It also extends its services via its website and mobile phone app.
As of now, the company features around 2,000 retail units, just behind Apollo. It has the most number of stores in Karnataka, followed by the Indian states of Tamil Nadu and Telangana.
MedPlus also has the highest revenue share in the cities of Bangalore and Chennai.
Know About the Financial Growth
The company’s vision is to focus on a cluster-based approach. Here, it initially aims to achieve a high customer volume in a highly-populated area before expanding into other locations.
Over the past two years, the revenues of MedPlus have escalated at a compounded growth rate of 16%. However, a significant portion of this growth happened due to new store openings rather than sales generation from existing stores.
The company also participates in stocking up inventory, which results in low cash flows. MedPlus’ inventory has nearly doubled to reach Rs. 750 crores in 2021. Although inventory stack up is often negatively viewed as the inability to sell goods, MedPlus has bridged this gap by supplying its products to new stores during the COVID-19 pandemic.
MedPlus features a robust product portfolio with franchises across major states, including Maharashtra, Karnataka and West Bengal. With its omnichannel business strategy, the company aims to widen its horizons through a centralised mechanism.
Frequently Asked Questions
- What is MedPlus’ EBITDAmargin?
The EBITDA margin of MedPlus is around 4%.
- When was MedPlus founded?
MedPlus was founded in 2006.
- Who are the book running managers on this IPO?
MedPlus IPO book running managers are Credit Suisse Securities, Nomura, Edelweiss and Axis Capital.