MedPlus Health IPO to open on Dec 13 at Rs 780-796/share price band

MedPlus Health Services Ltd, a pharmacy retail chain, on Tuesday fixed a price band of Rs 780-796 a share for its Rs 1,398 crore initial share sale, which will open for public subscription on December 13.

The three-day initial public offering (IPO) will close on December 15. The bidding for anchor investors will open on December 10.

The initial share-sale comprises fresh issuance of equity shares worth 600 crore and an offer for sale (OFS) of up to equity shares aggregating up to Rs 798.30 crore by promoter and existing shareholders.

The company has cut the OFS size to Rs 798.30 crore from Rs 1,038.71 crore.

The issue includes a reservation of equity shares worth Rs 5 crore for the company's employees who will receive those shares at a discount of Rs 78 per share to final issue price.

Proceeds of the fresh issue will be used for funding working capital requirements of the company's subsidiary, Optival.

Investors can bid for a minimum of 18 equity shares and in multiples thereof.

MedPlus was founded in 2006 by Gangadi Madhukar Reddy, who is the company's managing director and chief executive officer.

Speaking to reporters, Reddy said the company's growth depends on sales and number of stores being added every year.

"Last year we put in 350 stores despite Covid being there and this year despite closing down two months because the Covid second phase again in the first half we had 350 which basically means that we are able to add stores 700 stores this year," he said.

The retail chain is also focusing on increasing sales from private label goods, Reddy said.

According to him, currently the share of private labels in the overall revenue was at 11.98 per cent.

He said except the national capital MedPlus is present in all top ten cities of the country.

Half of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and 35 per cent for retail investors.

The Hyderabad-based pharmacy retailer offers a wide range of products, including pharmaceutical and wellness products such as medicines, vitamins, medical devices and test kits, and FMCG products such as home and personal care products, including toiletries, baby care products, soaps and detergents and sanitisers.

MedPlus was also the first pharmacy retailer in India to offer an omni-channel platform and continues to scale up its retail store network.

The company maintains a strong focus on scaling up its store network, having grown from operating initial 48 stores in Hyderabad at the conception of the business to operating India's second largest pharmacy retail network of over 2,000 stores distributed across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal and Maharashtra, as of March 31, 2021.

Axis Capital, Credit Suisse Securities (India), Nomura Financial Advisory and Securities (India) and Edelweiss Financial Services are the book running lead managers to the issue.

The equity shares are proposed to be listed on BSE and NSE.