MedPlus Health Services Files DRHP for IPO
MedPlus Health Services, which had filed DRHP with SEBI for its proposed Rs.1,639 crore IPO, has got SEBI observations. In the IPO parlance, SEBI observations is tantamount to an IPO approval. Here are some key points to note about the IPO.
1) The Rs.1,639 crore IPO of MedPlus Health Services will comprise of a fresh issue of Rs.600 crore and an offer for sale by existing shareholders to the tune of Rs.1,039 crore.
With the DRHP approved, the company will undertake to address any specific changes suggested by SEBI and then go ahead with its RHP filing with the ROC.
2) Out of the OFS component, two early shareholders will be the major sellers. PI Opportunities Funds will sell shares worth Rs.500 crore in the OFS while Lone Furrow Investments will sell shares worth Rs.450 crore. The balance of Rs.89 crore will be raised by smaller shareholders including the promoter shareholders.
3) MedPlus Health Services is into pharmacy retail and health support services and this business is largely working capital intensive.
Hence the fresh issue component of the IPO will be used for working capital purposes. The company will also use part of the fresh funds to fund its subsidiary, Optival.
4) MedPlus Health Services is based out of Hyderabad and one of the largest pharmacy retailers in the region. It was promoted by first generation entrepreneur, G Madhukar Reddy.
Its products include, apart from medicines, vitamins, medical products, test kits, FMCG products as well as baby care products, detergents and sanitizers.
5) The MedPlus franchise extends across the states of Tamil Nadu, Andhra Pradesh, Telangana, West Bengal, Odisha, Karnataka and Maharashtra.
Its stores network has expanded from 48 stores in 2006 to 2,000 stores currently. It is ranked India’s second largest pharmacy network.
6) The company adopts an omnichannel strategy in that it offers online selling as well as brick-and-mortar selling services through a centralized mechanism.
It also features a whole array of FMCG brands at its various outlets while the retailing is done under its MedPlus brand.
7) The MedPlus Health Services IPO will be lead managed by Axis Capital, Credit Suisse Securities, Nomura Financial Advisory and Edelweiss Financial, who will act as the book running lead managers to the issue.
The company has just completed 15 years in the pharmacy retail business.
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