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MEDPLUS IPO

  • Writer: Yash Mehta
    Yash Mehta
  • Dec 12, 2021
  • 2 min read


IPO Details:

Price Band: 780-796

Cutoff Price: 796


About Company:


Medplus Health Services Ltd. (MHSL) 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 FY21. It offers a wide range of products, including (i) pharmaceutical and wellness products, including medicines, vitamins, medical devices and test kits, and (ii) fast-moving consumer goods, such as home and personal care products, including toiletries, baby care products, soaps and detergents, and sanitisers.

It has maintained a strong focus on scaling up store network, having grown from operating initial 48 stores in Hyderabad at the conception of business to operating India's second-largest pharmacy retail network of over 2,000 stores distributed across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal and Maharashtra, as of FY21.


Competitive Strengths:

  1. India’s Second Largest Pharmacy retailer.

  2. Established Brand and Value Proposition to Customers.

  3. Successful Track Record of Expansion Using a Distinct Cluster-based and Replicable Store Unit Expansion Approach.

  4. High Density Store Network Enhancing Omni-channel Proposition.

  5. Lean Cost Structure and Technology Driven Operations.

  6. Well Qualified, Experienced and Entrepreneurial Board and Senior Management Team.

Strategies:

  1. Strengthen Market Position by Increasing Store Penetration in Existing Clusters and Developing New Clusters.

  2. Further, Develop an Omni-channel Platform with a Hyperlocal Delivery Model.

  3. Increase the Share of Private Labels and Enhance the Stock Keeping Unit (“SKU”) Mix.

  4. Enhance Revenue and Increase Customer Wallet Share Through Continued Investment in Technology Infrastructure and Expansion into Adjacent Healthcare Vertical.

  5. Continue to Increase Operating Efficiency and Enhance Supply Chain Management to Drive Profitability.

Financial Performance:



Revenues of the company is increasing year on year. In FY20, Net Profit and EPS of the company got reduced but again it scaled up. With EPS of 6, the company's Price to Earning (P/E) is 132.


Objects of the Issue:


The Net Proceeds from the Issue are proposed to be utilised in the following manner:

  1. Offer for Sale

Competitors Comparison:


There are no listed competitors in this space. Company cutoff price is at P/B of 11.6.


Grey Market Premium:


Our view: GMP of the IPO is good and company is profitable plus revenues of the company is growing. I will subscribe to this IPO for listing gains.


Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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