Wellness Forever Medicare Ltd IPO

The company plans to raise between Rs.1,500-Rs.1,600 crore. This IPO comprises of a fresh issue worth Rs.400 crore and an offer for sale of up to...

Status: Upcoming
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About Wellness Forever Medicare Ltd

Last Updated: 29 October 2024 3:23 PM by 5Paisa

Wellness Forever Medicare was founded in 2008 by three veterans in the pharmaceutical industry- Ashraf Biran, Gulshan Bakhtiani and Mohan Chavan. The company has 236 stores across 23 cities in Maharashtra, Karnataka and Goa. They have a registered customer base of 6.7 million customers as of June 31, 2021. They aim to increase their market penetration in the Tier 2 and Tier 3 cities and also actively participate in the e-commerce segment which has an estimated growth CAGR of 45%.
The Indian pharmacy retail sector has been growing at a very healthy rate because of the increase in healthcare expenditure and consumer base. India’s pharmaceutical industry is the third largest in the world by volume and 14th largest by value. The market value of the Indian pharmaceutical market is Rs.150,000 crore in FY20.
Pharmacy chains have 8.5% of the total pharmacy retail market in India in FY 2021.The company opened 31, 35 and 50 stores in FY19, FY20 and FY21 respectively. Out of these, 115 stores are operational as of June 30,2021. An approximate Rs.456.54 million is estimated as the cost of all the stores opened by the company in the last three fiscal years. Wellness Forever Medicare has a goal of opening 180 stores by FY24.

Wellness Forever Medicare Ltd Financial Status

Financials:

Particulars (In Rs cr)	FY21	FY20	FY19
Revenue	924	863.25	676.98
PAT	-34.85	-5.32	-1.33
EPS (In Rs)	-7.11	-1.16	-0.31

Particulars (In Rs cr)	FY21	FY20	FY19
Total Assets	608.75	476.59	382.30
Total Borrowings	102.39	83.15	81.54
Equity Share Capital	6.34	6.17	5.70

Peer comparison:

Revenue from operations

Company (in Rs Cr)	FY21	FY20	FY19
Apollo Pharmacy	5610	4821	3886
MedPlus	3069	2871	2273
Wellness Forever	892	871	684
Emami Frank Ross	NA	447	405
Thulasi Pharmacy	NA	139	125

EBITDA Margins

Company (in %)	FY21	FY20	FY19
Apollo Pharmacy	6.40	6	5.20
MedPlus	5.70	3.45	2.89
Wellness Forever	NA	3.74	3.98
Emami Frank Ross	NA	46	40
Thulasi Pharmacy	NA	3.37	2.40

Wellness Forever Medicare Ltd IPO SWOT Analysis

Strengths

1. The company has a high inventory turnover which reduces the holding cost which in turn increases the working capital efficiency
2. Customer loyalty programs and great customer service
3. Due to vertical integration and economies of scale, they have a high gross margin
4. Discounts for customers which make the store more attractive to more people
5. E-commerce presence that provides auto refills, discounts and a wide range of products

Weaknesses

1. They have a very limited presence, concentrated mainly in Maharashtra
2. E-commerce segment lacks in profitability to date
3. The company has difficulty in catering to the Tier 2 cities due to higher turnaround time

Opportunities

1. The modern pharmacy retail is expected to have a growth CAGR of 25% in next 5 years, growing significantly faster than many other segments
2. The brick and mortar stores have a certain edge over e-pharmacy in adopting an omni-channel approach because they have already established network of stores which can supply the localities and act as a place to stock more inventory

Threats

1. As the company is not very technologically advanced, there is always a chance that mismanagement of the inventory could occur which would in turn lead to a low fulfillment rate
2. High amount of competition from established e-pharmacy companies

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