Medplus Health Services IPO
MedPlus Health Services, the country's second largest pharmacy retailer, listed with a decent 30.65 percent premium on December 23.
The stock opened at Rs 1,015 on the BSE, and at Rs 1,040 on the National Stock Exchange, higher than the issue price of Rs 796 per share.
The IPO had seen a healthy response from investors, and was subscribed about 53 times during December 13-15. The portion set aside for qualified institutional buyers was booked 112 times and that of non-institutional investors saw 85 times subscription.
The portion reserved for retail investors and employees was subscribed 5.23 and 3.05 times, respectively.
The pharmacy retailer has mobilised Rs 1,398 crore from its public issue, which comprised a fresh issue of Rs 600 crore that will be used for working capital requirements of its subsidiary Optival Health Solutions.
Incorporated in November 2006 in Hyderabad, Medplus Health Services has a network of over 2,000 stores distributed across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal, and Maharashtra. It operates via physical stores (91 percent to sales in FY21) and online mode (9 percent to FY21 sales).
The IPO had received a thumbs up from most analysts given the strong growth in financials, positive industry outlook, and strong brand value.
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"Based on H1FY2022 numbers, the IPO is priced at an EV/EBITDA (enterprise value/earnings before interest, tax, depreciation and amortisation) of 27.5 times and price to sales at 2.5 times at the upper price band of the IPO. MedPlus offers good value proposition to its customer in terms of discount, a wide range of products and fast delivery," Angel One said in a note.
The brokerage believes that the company's omnichannel platform will help deliver strong growth in future. Hence, it had assigned a “subscribe” rating on the issue.
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"At the upper price band of Rs 796, MedPlus is available at a P/E of 71.5x (FY22E annualized), which appears to be aggressively priced," Geojit Financial Services had said. However, the brokerage has assigned a “subscribe” rating for the issue on a long-term basis considering its strong growth in revenue and PAT aided by strong store additions, improving margins, positive industry outlook and brand value.
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