MedPlus Looks To Raise INR 700 Cr For Pan-India Expansion With IPO

SUMMARY

The preparation of the IPO draft prospectus to start from December 2019 onwards

It aims to have over 3K outlets in the next four years

Founder Gangadi said the company might change IPO plans if it gets investors

Hyderabad-based pharmacy retail chain MedPlus has announced that it would be going for an initial public offering (IPO), with plans to raise about INR 700 Cr through the market.

Madhukar Gangadi, the founder and CEO of MedPlus, said that the preparation of IPO draft prospectus (DRHP) will start next month.

Speaking to ET, Gangadi said the company could reevaluate the idea of an IPO if it gets the right investors. With 77% stake in MedPlus, Gangadi said he would be looking to “offload stake to manage promoter level debt”.

Founded in 2006, MedPlus operates more than 1,700 outlets across seven states and plans to increase the number to 3,100 by 2023. Apart from its retail chain, it also runs businesses such as an optical store, MedPlusLens; MedPlus Pathlabs; RiteCure, a distributor of medical and surgical supplies to hospitals; and online pharmacy store MedPlusMart.com, launched in 2015.

In January 2018, it had raised a debt fund of $117.67 Mn (INR 750 Cr) from Goldman Sachs to buy back shares from existing private equity investors. Till date, the company has raised funding of $210.28 Mn.

According to the Deloitte 2016 report, the Indian healthcare market is projected to grow at a 23% CAGR to reach $280 Bn by next year.

Earlier last year, Amazon was also eyeing a stake in MedPlus to further expand its portfolio in India and enter the healthtech market. Amazon might be eyeing a piece of the epharmacy market, which is showing a lot of investor activity. In September, Mumbai-based Lightbox Ventures made its first investment in healthcare by funding $11 Mn in a pharmacy chain Generico, which is expanding to online pharmacy sales.

Within the healthtech ecosystem, epharmacies and telemedicine have been the sub-sectors with the most investment. Most recently, healthtech startup Meddo raised $3 Mn in Pre-Series A funding in a round led by SRI Capital. Other entities like growX Ventures, LetsVenture, Jitendra Gupta (cofounder Citrus Pay) and Venture Gurukool also participated in the round.

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