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Medplus Health IPO Subscription, GMP, Key Risks, Other Details; Should you Invest?

Medplus Health Services Ltd, the second-largest pharmacy retailer in India, has opened its initial public offering (IPO) this week. Medplus Health IPO witnessed a good response from the investors as it had received bids for 1.49 crore shares against the IPO size of 1.25 crore shares that were on offer. Medplus Health Services IPO was booked 1.19 times on December 14, the second day of bidding. The portion reserved for the retail investors was booked 2.17 times. The quota allocated for Qualified institutional buyers (QIBs) was subscibed 8 per cent while that of non-institutional investors was booked 36 per cent so far. The share set aside for the employees saw 94 per cent subscription. If you are planning to buy Medplus Health Services IPO, here are the key things to know

Medplus Health Services IPO Price, Dates

Medplus Health Services IPO will be open for subscription from December 13-15. The price band has been fixed at Rs 780–796 per equity share of face value Rs 2 each. Medplus Health Services IPO consists of a fresh issuance of shares worth Rs 600 crore and an offer for sale (OFS) of shares worth Rs 798.29 crore by selling shareholders. The company aimed to mop up a total of Rs 1,398.29 crore from the maiden offer.

Medplus Health Services IPO Objective

Investor PI Opportunities Fund-I will sell shares worth Rs 623 crore and SS Pharma LLC will offload shares worth Rs 107 crore via the offer for sale. Shore Pharma LLC, Natco Pharma, Time Cap Pharma Labs, A. Raghava Reddy, K. Prakurthi, Navdeep Patyal, Sangeeta Raju, R. Venkat Reddy, T.K. Kurien, Nithya Venkataramani, Atul Gupta, Manoj Jaiswal, Rahul Garg, Kollengode Ramanathan Lakshminarayana and Bijou Kurien are among others sharholders who are going to sell their shares.

Medplus Health Services IPO Lot Size

Investors can bid for a minimum of 18 equity shares and in multiples of 18 shares thereafter. Retail investors can invest a minimum of Rs 14,328 for one lot and a maximum of Rs 1,86,264 for 13 lots.

Medplus Health Services IPO Company Profile

Started in November 2006 by Gangadi Madhukar Reddy, Medplus Health Services Limited is the second largest pharmacy retailer in India, in terms of the number of stores as of March 31, 2021, and in terms of revenue from the operation. Medplus offers a wide range of pharmaceutical products and fast-moving consumer goods (FMGC), such as medicines, vitamins, medical devices, home, and personal care products, etc. Medplus maintained a strong focus on scaling up the store network, from the initial 48 stores in Hyderabad to operating India’s second largest pharmacy retail network of over 2,000 stores across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal and Maharashtra, as on March 31, 2021. Medplus reported a profit of Rs 63.11 crore for FY21, up sharply from Rs 1.79 crore in FY20. Revenue during the same period increased to Rs 3,069.26 crore from Rs 2,870.6 crore.

Medplus Health Services IPO Key Risks:

Analysts shared some of the key investment concerns regarding Medplus Health Services IPO (a) Rising competition, from offline as well as online companies like Apollo Pharmacy, Tata 1mg, Netmeds etc.

b) The company has got some benefit of Covid related revenue in 2021 and in H1FY2022, once Covid revenue normalizes it may be difficult for the company to have double-digit revenue growth

c) Company may face certain challenges to expand its retail chain in other geographies

Medplus Health Services IPO: Should you Subscribe?

“Based on H1FY2022 numbers, the IPO is priced at a EV/EBITDA of 27.5 times and price to sales at 2.5 times at the upper price band of the IPO. Medplus is the second largest pharmacy retailer in India, company offer a good value proposition to its customer in terms of discount, wide range of product and fast delivery. We believe that the company omnichannel platform will help to deliver strong growth in future. Hence, we are assigning a “Subscribe” recommendation to the Medplus Health Services Limited IPO,” said Angel One in a note.

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