The public offer of pharmacy retailer Medplus Health Services continues to see good subscription as it has received bids for 1.83 crore shares against the IPO size of 1.25 crore shares, subscribing 1.46 times on December 14, the second day of bidding.
Support from retail investors remains strong as their reserved portion was booked 2.64 times, and that of employees saw 1.73 times subscription.
Qualified institutional buyers have bought 9 percent shares of their reserved portion and non-institutional investors 50 percent.
Half of the net issue is reserved for qualified institutional buyers, 15 percent for non-institutional bidders, and the remaining 35 percent for retail investors.
The issue was subscribed 70 percent on its the first day, December 13.
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Medplus Health Services plans to garner Rs 1,398.3 crore through its public issue at the upper price band of Rs 796 per equity share. The offer consists of a fresh issue of Rs 600 crore, and an offer for sale of Rs 798.30 crore by PI Opportunities Fund-I, SS Pharma LLC and others.
The funds from the fresh issue will be utilised for working capital requirements of subsidiary Optival Health Solutions, besides general corporate purposes. The price band for the offer, which closes on December 15, is Rs 780-796 per share.
Also read - Medplus Health IPO: 10 key things to know before subscribing to the public issue
"At the upper end of the price band of Rs 796, the company's IPO is valued at P/E (price-to-earnings) of 72x at H1FY22 annualised EPS (earnings per share) and P/E of 151x on FY21 EPS, which looks expensive but will enjoy a scarcity premium. However, in terms of market capitalization/sales, the issue looks attractive at multiple of 3.0x at FY21 sales and 2.53x at H1FY22 annualised sales," said Ajcon Global.
The brokerage advised that investors with higher risk appetite could 'subscribe for listing gains'.
Also read - Medplus Health Services IPO. Should you subscribe to it?
Medplus has maintained a strong focus on scaling up its store network, from the initial 48 stores in Hyderabad to operating India's 2nd largest pharmacy retail network of over 2,326 stores (through subsidiaries) in 261 cities as of September.
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