In these pandemic times, it makes perfect sense that healthcare and related companies would want to raise some money. And that’s what’s happening here. Medplus Health Services Limited is all set for an IPO!
Medplus is looking to raise Rs 1,400 crores from the public via a mix of a fresh issue of shares and an offer for sale component as well.
But first, let's see what the company is all about:
Medplus is India’s second-largest retail pharmacy chain, in terms of revenue and number of stores. The company was founded in 2006 by Gangadi Madhukar Reddy, who still runs it as MD & CEO.
His focus has always been on scaling up the store network - the company started with 48 initial stores in Hyderabad and has since grown to a network of over 2,000 stores across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal and Maharashtra.
Amongst organized pharma retailers, Medplus apparently has 30% share in Chennai, 29% in Bengaluru, 30% in Hyderabad and 22% in Kolkata, which are its key markets. In fact, Medplus was the first pharma player to offer an omnichannel experience when they started focusing on online sales in 2019-20.
Medplus did Rs 3,070 crores in revenue in FY21 vs Rs 2,870 crores in FY20. Net profit grew much more though, up from just under Rs 2 crores in FY20 to Rs 63 crores in FY21.
And in the first half of the current financial year, they’ve already made more profit than the last two financial years combined - Rs 66 crores from April-Sep’21!
The company is looking to raise Rs 1,400 crores via the IPO.
Of this, ~Rs 800 crores will be an offer for sale, meaning the proceeds will go to existing shareholders who are selling some of their holdings.
The remaining Rs 600 crores will be via a fresh issue of shares, and this money will go to the company, which wants to use it to supplement the working capital needs of one of its subsidiaries. And also the usual ‘general corporate purposes’.
The offer opens for subscription today, valuing the company at Rs 9,500 crores at the upper price band of Rs 796 per share.
Disclaimer: this is not investment advice and must not be used as the basis of any investment decisions. Please do your own research before making any investments.