MedPlus Health Services is a good play on growing e-commerce pharmacy space, say analysts; GMP at ₹300

• Pharmacy retail chain MedPlus Health Services is looking to raise ₹1,639 crore through IPO.
• The company offers both offline and online sales of pharmaceutical products through website and mobile application.
• Azim Premji’s PI Opportunities Fund is among the promoters of the company selling its shares through the IPO.

Another IPO that is open for subscription this week is Hyderabad-based pharmacy retail chain MedPlus Health Services. The ₹1,398 crore initial public offering (IPO) will close on December 15.

The IPO consists of a fresh issue of ₹600 crore worth of shares and an offer for sale of shares worth ₹798.29 crore by selling shareholders. 18 shareholders will be selling shares in the IPO including PI Opportunities fund, which is an affiliate of PremjiInvest. PremjiInvest is the family office of billionaire Azim Premji, founder chairman of Wipro.

The company is India's second-largest pharmacy retailer in terms of the number of stores and revenue. It sells a wide range of pharmaceutical products and fast-moving consumer goods (FMGC), such as medicines, vitamins, medical devices, home, and personal care products, etc

The grey market premium of the company’s shares were demanding a premium of ₹300 per share. Moreover, analysts are also bullish on the company as it sees several growth opportunities in the pharmacy retailing space.

Brokerage firms	Recommendation
ICICIdirect	Subscribe
Angel One	Subscribe
KRChoksey	Subscribe
Swastika	Subscribe
Religare	Positive

Analysts at ICICIdirect say that MedPlus with its clustered store presence is well suited to leverage on an omni-channel platform (online and offline) with a hyper local delivery model. “We assign SUBSCRIBE rating given its unique model and decent valuation,” said the brokerage firm.

A report by Religare Broking said that MedPlus is well-positioned to benefit from a fast-growing Indian e-commerce pharmacy retail market. “Going forward, the company intends to grow its Omni-channel platform with a hyper-local delivery model. Also, they plan to strengthen the market reach by entering new geographies. On the financial front, the company’s performance seems decent. From a long term growth perspective, we have a positive view on MedPlus,” said analysts at the broking firm.

MedPlus is among the top two players in terms of physical store addition and average revenue per store.

Players	Net store additions in FY21	Average revenue per store in FY21
Apollo Pharmacy	4,118	₹1.42 crore
MedPlus	2,081	₹1.59 crore
Wellness Forever	223	₹4.68 crore

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