Healthy debut for MedPlus Health Services as it ends session at 41% premium

The stock of pharmacy chain MedPlus Health Services made a strong debut on the bourses. The stock got listed at Rs 1,015 — a 27.5 per cent premium to its issue price. The stock ended the session at Rs 1,120.85 — 41 per cent above its issue price.

After listing, the company has a market capitalisation of Rs 13,372 crore. MedPlus had set a price range of Rs 780-796 per share for its Rs 1,398-crore initial public offering (IPO). The IPO of the Warburg Pincus-backed company comprised a fresh issue of Rs 600 crore and an offer for sale (OFS) of Rs 798.3 crore.

Premji Invest’s PI Opportunities Fund and Natco Pharma were among the selling shareholders.

The company had downsized its IPO. In August, when the company filed its offer document with the Securities and Exchange Board of India, the IPO size was pegged at Rs 1,638.7 crore. While the fresh issue component remained the same, the OFS portion was reduced by around Rs 240 crore.

The company plans to use the fresh issue proceeds to fund the working capital requirements of its subsidiary Optival Health Solutions and general corporate purposes.

MedPlus is the country’s second-largest pharmacy retailer in terms of revenue for 2020-21 (FY21) and the number of stores. The company operates over 2,000 stores across seven states, including Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka.

The company offers medicines, wellness products, medical devices, and fast-moving consumer goods. In FY21, the company reported revenue of Rs 3,048 crore and a net profit of Rs 62.7 crore. Axis Capital, Edelweiss, Credit Suisse, and Nomura were the bankers to the issue.