Retail pharmacy chain MedPlus has shortlisted three investment bankers as advisors as it prepares for an IPO in 2021 to raise around 2,000 crore rupees.
The move comes on the back of a surge in demand for COVID-19 related products which has benefited pharmacy players, especially those with online offerings.
“MedPlus has recently shortlisted Axis Capital, Nomura and Edelweiss Financial Services. They are likely to select a fourth investment bank soon,” Moneycontrol said quoting one of few sources.
“As of now, the plan is to raise around 1,800 crores rupees to 2,000 crores rupees via the IPO. This may increase depending on valuations and the size may vary later,” the report quoted a second source.
“MedPlus is one of the clear beneficiaries of COVID-19 from a sales and demand point of view. It is a pandemic proof business so to say,” a third individual with knowledge of the proposed IPO told Moneycontrol.
A fourth individual confirmed the shortlisting of investment bankers and said the process would be kicked off shortly, the report said.
“The IPO will be a combination of primary and secondary issue of shares and will help to provide a partial exit to investors like Warburg Pincus and Premji Invest. The proceeds can also be used to trim debt & may facilitate growth capital for store expansion,” he elaborated.
All four individuals spoke to Moneycontrol on the condition of anonymity.
If these plans fructify, arguably, MedPlus could become India’s first listed retail pharmacy chain. To be sure, It’s not the only pharmacy chain planning a d-street debut. On April 26th, 2021, Mint reported that Poonawalla family-backed Wellness Forever was eyeing an IPO.
MedPlus is an omni-channel retailer with over 1800 stores serving over three lakh customers daily according to its website. It also operates online store MedPlusMart, lab testing centres MedPlus Pathlabs and surgical equipment distribution business RiteCure. As of March 2021, MedPlus had revenues of Rs 3,068 crores and PAT of around Rs 100 crores. Other than medicines and health products, the chain’s stores also provide items under baby needs, personal care and household requirements.
Largely focused on South India until now, the 15-year-old MedPlus has expanded to West Bengal, Odisha and Maharashtra and has more than 10,000 employees. In November 2019, MedPlus founder Madhukar Gangadi, had said the firm was looking at an IPO to raise more than 700 crore rupees.
Data from the Department of Industrial Policy and Promotion (DIPP) revealed that the Indian retail pharmacy segment was estimated to be worth $18 billion in 2020 and is expected to touch $50 billion by 2025. According to an EY report titled E-pharma: Delivering Healthier Outcomes, e-pharma players are likely to attain the combined market size of $2.7 bn by 2023 from the current $360 million.