MedPlus Health IPO opens next week; check price band, lot size, grey market premium, bid details

New IPO: MedPlus Health public issue will open for subscription on 13 December, and will remain open for bidding till 15 December. The price band of the issue has been fixed at Rs 780-796 per equity share.

MedPlus IPO
MedPlus IPO's price band has been fixed at Rs 780-796 per equity share

By Harshita Tyagi

MedPlus Health Services Ltd IPO seems to have attracted considerable investor interest ahead of the opening next week, going by nearly 40% premium in grey market trading. MedPlus Health public issue will open for subscription on 13 December, and will remain open for bidding till 15 December. The price band of the issue has been fixed at Rs 780-796 per equity share. The pharmacy retailer’s Rs 1,398.3-crore IPO consists of fresh issuance of shares worth Rs 600 crore and an offer-for-sale (OFS) of shares worth Rs 798.29 crore. The proceeds from the fresh issue will be used for working capital requirements of material subsidiary Optival.

MedPlus IPO bid details

– Price Band: Rs 780-796
– Issue Size: Rs 1,398.3 crore
– Minimum Bid Size: 18 shares
– Bid Lot Size: Multiples of 18 shares
– Minimum Investment for retail investors: Rs 14,328 for one lot
– Maximum investment for retail investors: Rs 1,86,264 for 13 lots.
– QIB reserved quota: 50%
– Retail investor quota: 35%
– HNI / NII quota: 15%
– Employee quota: Worth Rs 5 crore
– Employee discount: Rs 78 apiece
– MedPlus Health cut its IPO size to Rs 1398.3 crore from Rs 1,639 crore earlier

MedPlus IPO Grey Market Premium

The shares of Medplus Health were trading at a premium of Rs 300 in the grey market on Friday (10 December), according to IPOWatch and IPO Central.

Investors selling shares in MedPlus OFS

– The Investor PI Opportunities Fund – I: Rs 623 crore
– SS Pharma LLC: Rs 107 crore
– Premji Invest’s PI Opportunities Fund: Up to Rs 623 crore
Natco Pharma: Rs 10 crore

Others: Shore Pharma LLC, Natco Pharma, Time Cap Pharma Labs, A Raghava Reddy, K Prakurthi, Navdeep Patyal, Sangeeta Raju, R Venkat Reddy, TK Kurien, Nithya Venkataramani, Atul Gupta, Manoj Jaiswal, Rahul Garg, Kollengode Ramanathan Lakshminarayana and Bijou Kurien will also offload shares through this OFS.

Pre IPO sale of shares

Lavender Rose Investment Ltd, a Mauritius-based unit of private equity firm Warburg Pincus, sold shares worth Rs 550 crore in MedPlus Health Services Ltd ahead of the IPO. It sold around 6.9 million shares or a 6.2% stake in MedPlus Health Services to investors, including asset management and life insurance business of SBI Mutual Fund, Motilal Oswal Mutual Fund and Malabar India Fund, an addendum to the MedPlus IPO prospectus showed. Currently, Lavender Rose is the largest shareholder in Medplus with 24.6% stake, followed by PI Opportunities Fund – I (22.07%), Lone Furrow Investments (15.42%), Agilemed Investments (14%), and Gangadi Madhukar Reddy (13.74%).

Financials

– Profit: Rs 63.11 crore for FY21, up sharply from Rs 1.79 crore in FY20.
– Revenue: Rs 3,069.2 crore in FY21, up from Rs 2,870.6 crore in FY20
– Adjusted EBITDA: Rs 270.3 crore in FY21, up 43.98% from Rs 130.4 crore in FY19
– Operating ROCE: 26.08% in FY21, up from 19.87% in FY20

About MedPlus

Medplus is the 2nd largest pharmacy retailer in India, in terms of revenue from operations for the financial year 2021, and number of stores as of March 31, 2021. It offers a wide range of products, including pharmaceutical and wellness products such as medicines, vitamins, medical devices and test kits. It also offers FMCG products including home and personal care products, including toiletries, baby care products, soaps and detergents, and sanitizers.

The company has maintained a strong focus on scaling up their store network, having grown from operating their initial 48 stores in Hyderabad at the conception of their business to operating India’s 2nd 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… Company’s supply chain is supported by an algorithm driven automated replenishment and stock picking system that is driven by a real time inventory analytics platform. They generally procure their inventory directly from pharmaceutical companies. Their product offering is enhanced by their curated selection of private label products, from which they are able to derive higher margins while maintaining quality,” said Axis Capital in its IPO note.

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