Medplus Health IPO: The IPO of MedPlus Health Services, the country’s first omni-channel platform provider and second largest pharmacy retail chain, has opened today (13 December). Under this IPO of Rs 1398.29 crore, new shares worth Rs 600 crore will be issued. Investors can invest in this IPO in the price band of Rs 780-796. Talking about the gray market, its price has increased from a premium of Rs 250 to Rs 300 premium against the upper price of the price band. Ahead of the opening of the IPO, the company has raised Rs 418 crore from 36 anchor investors. Most of the brokerage firms have given subscribe rating to this IPO.
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This is the opinion of brokerage firms
Prabhudas Lilladher: Subscribe
Brokerage firm Prabhudas Lilladher in its IPO report has given subscribe rating to Medplus Health IPO. The brokerage firm has advised to subscribe to this issue for two reasons. The first reason is that despite the bumper discounts, Medplus Health’s business is profitable. The second reason is that as the Indian retail pharmacy market is moving from unorganized to organized omni channel players, there is a lot of growth potential for MedPlus Health. According to analysts, the Indian retail pharmacy market is growing at a CAGR of 10% (Compound Annual Growth Rate) in the next five years.
Angel One: Subscribe
MedPlus is the second largest pharmacy retailer in the country. This company provides its customers with services like discounts, wide range of products and fast delivery. Analysts at Angel One believe that the company’s omnichannel platform will help the company achieve strong growth in the future. In such a situation, investors can invest money in this IPO, considering the better growth potential.
ICICI Direct: Subscribe
According to brokerage firm ICICI Direct, MedPlus can grow rapidly on the basis of clustered store presence and hyper local delivery model. According to the upper price of the price band, this IPO is at 43.9x EV/EBITDA and 3.1x EV/Sales price of FY 2021. ICICI Direct has given subscribe rating to MedPlus Health’s IPO due to its unique model and reasonable valuation.
Key Details About MedPlus Health IPO
- Medplus Health’s IPO of 1398 crores has opened on 13th December and investors will be able to invest in it till 15th December.
- Under this issue, new shares worth Rs 600 crore will be issued.
- The price band for this issue has been fixed at Rs 780-796 per share.
- The lot size is of 18 shares i.e. according to the upper price of the price band, retail investors will have to invest at least Rs 14,328.
- 50 per cent of the issue has been reserved for Qualified Institutional Investors (QIBs), 15 per cent for Non-Institutional Investors (NIIs) and 35 per cent for retail investors.
- Shares worth Rs 5 crore have been reserved for the employees of the company and they will get a discount of Rs 78 per share.
- The face value per share is Rs 2.
- The allotment of shares can be finalized on December 20 and its listing has been fixed on December 23.
- The money raised through the IPO will be used to meet the working capital requirements of the company’s subsidiary Optical and for general corporate purposes.
- Axis Capital, Credit Suisse Securities (India), Nomura Financial Advisory & Securities (India) and Edelweiss Financial Services are the book running lead managers to the issue. The registrar for the issue is KFintech Private.
Company’s business status
- Hyderabad-based pharmacy retailer MedPlus Health sells medicines, vitamins, medical devices and test kits. Apart from this, it also sells toiletries, baby care products, soaps, detergents and sanitizers.
- It is the country’s first omni-channel retailer platform pharmacy retailer and is continuously expanding its retail network.
- It is the second largest pharmacy retail network in the country with a network of 2165 stores across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal and Maharashtra as per data available till March 2021.
- Talking about the financial position of the company, it had a net profit (Profit After Tax) of Rs 11.92 crore in the financial year 2019, while in the next financial year, Medplus Health made a profit of only Rs 1.79 crore. However, the very next year, the company’s business situation improved tremendously and earned a net profit of Rs 63.11 crore.
(Article: Harshita Tyagi)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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