Leading pharmacy chain MedPlus is planning to launch its IPO in financial year 2020-21. The company – backed by Goldman Sachs and PremjiInvest, among others – has invited merchant bankers to pitch for the IPO, according to a report by Moneycontrol. MedPlus IPO is likely to mobilize anywhere between INR800 crore and INR1,000 crore through primary and secondary issue of shares.
The update comes at a time when stock markets are reeling under pressure from Coronavirus scare. Nevertheless, an IPO would make MedPlus the country’s first listed retail pharmacy chain.
Led by founder and CEO Madhukar Gangadi, the 14-year old company counted Ajay Piramal’s India Venture Advisors, Mount Kellett Capital Management and TVS Capital Funds among its investors but MedPlus bought these investors out in January 2018 after raising USD115 million in debt funding from Goldman Sachs. It is learnt that Azim Premji’s investment arm PremjiInvest has a minority stake (13%) in the company while Amazon is also reportedly looking to invest.
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MedPlus has a presence in over 1,500 localities across 7 states in India and plans to expand the figure to 3,100 outlets by 2023. Apart from the physical outlets, the company has online presence through MedPlusMart. MedPlus has also diversified in related businesses of surgical equipment, pathological tests, frames, prescription glasses, sun glasses and contact lenses.
Since the company is yet to file draft papers, not much is known about its financials. The report added that the company is looking to close FY2021 with revenues and EBITA of around INR2,600 crore and INR70 crore, respectively.
MedPlus IPO to test slumping stock market
Global stock markets have slumped in March this year in one of the sharpest corrections in history. As such, it is not clear how much traction an IPO can gain in such times. Owing to the poor demand, SBI Cards IPO had a muted listing while Antony Waste Handling Cell had to cancel its primary offer.
As of now, 26 companies are ready with regulatory clearances but several have backtracked on IPO plans given the extremely high volatility. Nevertheless, it could be a good time to kick start the process as completing paperwork, filing the same with regulator and getting required approvals can easily take 12 months.