PremjiInvest Looks To Back Pharmacy Retail Chain MedPlus

The PremjiInvest Opportunities Fund has proposed to invest in MedPlus Health Services according to a CCI filing accessed by Inc42. The proposed transaction is being notified under Section 5(a) of the Competition Act, 2002.

Pi Opportunities Fund-I, the Category II alternative investment fund (AIF) of PremjiInvest, registered under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, is looking to acquire a significant stake in MedPlus. The company is primarily engaged in pharmacy retailing (through its subsidiaries).

Madhukar Gangadi launched MedPlus in 2006 after he realised the existing gaps in the Indian pharma industry. He found that around 30% of the counterfeit medicines sold across the world came from India and decided to launch MedPlus in order to provide a reliable source of medicines to Indian consumers.

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, the startup raised a debt fund of $117.67 Mn (INR 750 Cr) from Goldman Sachs to buy back shares from existing private equity investors, taking its total funding raised so far to $210.28 Mn.

In July 2018, Inc42 reported that Amazon was eyeing a stake in MedPlus to further expand its portfolio in the Indian market.

In another development, LiveMint today (January 9) reported that cab aggregator Ola is in talks to acquire online medicine delivery startup Myra Medicines.

We tried to reach out MedPlus founder Gangadi. An email sent to Myra founder Faizan Aziz by Inc42 did not elicit any response till the time of publication.

The Indian healthcare market, which is worth $100 Bn, is likely to grow at 23% CAGR to reach $280 Bn by 2020, as per a Deloitte 2016 report. However, the Indian epharmacy sector is going through turbulent times.

In September 2018, the Centre issued new rules for epharma companies, regularising their presence in the country. Soon after, the All India Organisation of Chemists and Druggists (AIOCD) opposed the government’s decision to roll out the epharmacy regulation and called for a day-long nationwide strike on September 27.

Recently, the Delhi and Madras high courts issued contradictory statements on the online sale of medicines. While the Delhi HC has issued an all-India ban on the online sale of medicines, the Madras HC suspended its October 2018 ban.

With a two-judge bench issuing the rulings in both the high courts, the orders have equal weightage and can’t be ignored. Epharma players such as MedLife, 1mg and Netmeds among others will have to wait for clarity from the Supreme Court or the central government on the matter.

[The development was first reported by paper.vc.]