MedPlus Health Services IPO: Price Band, GMP And Other Details

New Delhi: The initial public offering (IPO) of pharmacy retail chain MedPlus Health Services opened for subscription on Monday. The three-day offer will conclude on December 15.

The IPO comprises fresh issuance of equity shares worth Rs 600 crore and an offer for sale (OFS) of up to equity shares aggregating up to Rs 798.30 crore by the promoter and existing shareholders. MedPlus has cut the OFS size to Rs 798.30 crore from Rs 1,038.71 crore.

Price Band:

The company has fixed a price band of Rs 780-796 a share for its initial share sale.

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 the final issue price.

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.

Lot size:

Investors can bid for a minimum of 18 equity shares and in multiples thereof. At the upper end, one lot of MedPlus shares will cost Rs 14,328.

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

Grey Market Price:

According to market observers, the pharmacy company is seen trading at a premium of Rs 300 in the grey market, at the upper price band of the issue.

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 pharmacy retail chain has mobilised Rs 418 crore from anchor investors ahead of its initial share sale.

Should You Subscribe?

"With the overall transition in the organised retail pharmacy, Medplus is the only one to have omni-channel platform in the country. We recommend to subscribe the issue on the basis of its improved scale and profitability and the positive outlook of organised retail pharmacy in coming years," Ravi Singh, Vice President and Head of Research, ShareIndia, said.

"The IPO looks terrific. It is the second largest health services IPO in India, with good management and sales on all platforms, including online, via phone, and in retail locations. It exhibits strong development, although it is mostly based in the south, with intense rivalry from both the unorganised and organised sectors, and the growth in the Covid era is sustainable," Ravi Singhal, Vice Chairman at GCL Securities, said.

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

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.