medplus ipo

Medplus IPO Good or Bad? Check GMP, IPO Dates, Allotment & Review

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Medplus Health Service Limited Introduction

Medplus a Hyderabad-based company is an online plus offline pharmaceutical retail store chain, they are also the second-largest pharmacy retailer in India, in terms of revenue and number of stores. It is India’s second-largest pharmacy retailer with over 2000 stores across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal, and Maharashtra, as of March 31, 2021.

Medplus Health Limited is coming up with an IPO on 13th Dec 2021, The public offer of MedPlus Health comprises a fresh issue of equity shares aggregating up to Rs. 600 crores and an offer for sale of equity shares worth around Rs. 800 crores from existing shareholders.

What are the risk factors in Medplus IPO?

1. Company have outstanding legal proceedings which if materialize may adversely affect the company

2. Medplus Health Limited is highly dependent on third-party manufacturers for the manufacturing of inventories

3. Company’s promoters have pledged a part of their shares under various loans

4. Company has shown negative cash flows in the past three years, also may continue in future

5. Medplus has contingent liabilities which, if materialized, may adversely affect the business

6. Company IPO consists 798 Cr towards OFS which will directly benefit shareholders not the company

What are the competitive strengths in Medplus IPO?

1. Medplus Health is the second-largest pharmacy retailer in India, in terms of (i) revenue from operations for the financial year 2021, and (ii) the number of stores as of March 31, 2021

2. “MedPlus” brand is a well-established brand

3. Company has a great track record of expansion from 48 stores in 2006 to 2000 stores in 2021

4. Medplus is the first pharmacy retailer in India to offer an omnichannel platform

5. Company has a Well Qualified, Experienced and Entrepreneurial Board as well as Senior Management, Team

6. Company’s revenue is consistently growing moreover its profits are also growing

7. Medplus has also shown increasing margins in the past 3.5 years

What are the product offerings of Medplus Health Limited?

The company’s product mix primarily comprises branded pharmaceutical products, private label pharmaceutical products branded fast-moving consumer goods, and private label consumer goods, also the company has a pan India network of stores, company’s store details are as follows:

StateNumber of stores as of
June 30, 2021
Telangana443
Andhra Pradesh274
Karnataka520
Tamil Nadu458
West Bengal201
Maharashtra186
Odisha83
Total2,165
MED-PLUS HEALTH LIMITED STORE DETAILS

How are the financials of Medplus Health Limited?

  1. Medplus is showing consistent growth in revenues
  2. Profit is also growing, however in FY-20 due to Covid-19 Profit was impacted
Financial Year EndedRevenue (₹ Crores)PAT (₹ Crores)EPS (₹)
March 20192,284.9411.921.27
March 20202,887.891.790.2
March 20213,090.8163.115.75
As of September 30, 20201,470.9722.272.09
As of September 30, 20211,890.9066.375.99
MED PLUS HEALTH LIMITED FINANCIALS

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Promoters of Medplus health Services limited?

Gangadi Madhukar Reddy, Lone Furrow Investments Pvt Ltd, and Agilemed Investments Pvt Ltd are the promoters of the company.

Objects Of Medplus IPO net proceeds

Medplus Health IPO Size is Rs 1,398.3 Crores and also the details are below:

1) Offer for Sale (OFS) Rs 798.3 Crores:  Under OFS, selling shareholders would sell their shares and the company would not get any money from this IPO proceeds.

2) Fresh issue of Rs 600 Crores:  Fresh issue would be done towards the following purposes:

i) Funding working capital requirement of a subsidiary, Optival and

ii) General corporate purposes.

Medplus IPO open & close date

IPO open date is: 13th Dec 2021, as well as IPO close date, is: 15th Dec 2021

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Medplus IPO allotment, refund & listing date

The allotment date is: 20th Dec 2021

The refund date is: 21st Dec 2021

IPO listing date is: 23rd Dec 2021

Medplus IPO allotment status

Allotment can be checked through kcas.kfintech.com

Medplus IPO GMP (Grey Market Price)

IPO GMP is RS 210 as of 15th Dec 2021

Medplus IPO price band, RHP & details

IPO date13 Dec 2021 – 15 Dec 2021
Listing date23 Dec 2021
Price range780 – 796
Minimum order quantity18
(D)RHPView
PRICE BAND OF MED PLUS IPO

Medplus IPO valuation (Overpriced or not?)

Calculating with its upper price band of Rs 796

Now, the EPS (earning per share) for FY21 is 5.71 so the P.E ratio (price to earnings ratio) comes at 796/5.71=139.40x

If we consider the last 3 years weighted average EPS of Rs 3.19 and the upper price band of Rs 796, P/E works out to be 250x.

Therefore, the company is asking P.E ranging between 139X to 250X which is overpriced

However, there are no listed peers in the stock exchange, so the comparison is not possible

Medplus IPO good or bad? (review)

Medplus is an online plus offline pharmaceutical store chain, they are also the second-largest pharmacy retailer in India, in terms of revenue and number of stores. Looking at its IPO price it looks overpriced but as there are no listed peers to the company comparison is not possible, however, the company has shown good profitability and margins over the past years, and everyone knows the pharma sector is in a boost due to the Covid-19 pandemic, after considering all these factors it is a good investment for the medium to long term, it will be more attractive if the price is at a discount. Talking about listing gains till now it is showing a High grey market price which indicates a good listing.

Rating: 4 out of 5.

FAQ

1. Is there any employee discount in Medplus IPO

Yes, Employee Discount 78

2. How much retail quota is there in Medplus IPO?

QIB Shares Offered 50% of the net offer
Retail Shares Offered 35% of the net offer
NII (HNI) Shares Offered 15% of the net offer

3. What is the pre and post-promoter holding in Medplus IPO?

Pre Issue Share Holding
43.16%
Post Issue Share Holding
40.43%

4. How to apply for Medplus IPO?

Steps to apply in Medplus Health IPO through Zerodha
Visit the Zerodha website and log in to Console.
Go to Portfolio and click the IPOs link.
Go to the ‘Medplus Health IPO’ row and click the ‘Bid’ button.
Enter your UPI ID, Quantity, and Price.
‘Submit’ IPO application form.
Visit the UPI App (net banking or BHIM) to approve the mandate.

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