Medplus IPO subscribed 70% on bidding debut, retail portion booked 1.29 times

Medplus Health Services IPO

The initial public offering of Medplus Health Services, the second largest pharmacy retailer in India in terms of number of stores, has garnered bids for 87.62 lakh equity shares against an IPO size of 1.25 crore, subscribing 70 percent on December 13, the first day of bidding.

The company plans to mop up Rs 1,398.29 crore through its public issue, of which Rs 418 crore was raised from anchor investors on December 10. The offer comprises fresh issuance of shares worth Rs 600 crore and an offer-for-sale of Rs 798.29 crore by selling shareholders.

Retail investors have put in bids for 129 percent of shares set aside for them, and employees have bought 76 percent of shares reserved for them.

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The allotted quota of non-institutional investors was subscribed 16 percent, while qualified institutional buyers portion booked 6 percent.

The net proceeds from its fresh issue will be used for working capital requirements of material subsidiary Optival Health Solutions. The price band for the public issue, which closes on December 15, has been fixed at Rs 780-796 per equity share.

“Based on the H1FY2022 numbers, the IPO is priced at an EV/EBITDA of 27.5 times and the price-to-sales at 2.5 times the upper price band of the IPO,” said Angel One. EV/EBITDA is the enterprise value or earnings before interest, tax, depreciation and amortisation.

Also read - Medplus Health IPO: 10 key things to know before subscribing to the public issue

Medplus offers a good value proposition to its customer in terms of discount, wide range of product and fast delivery. “We believe that the company’s omnichannel platform will help deliver strong growth in future. Hence, we are assigning a ‘subscribe’ recommendation to the Medplus Health Services IPO,” said Angel One.

Medplus reported profit at Rs 63.11 crore for the financial year 2021, increasing sharply from Rs 1.79 crore in FY20. Revenue during the same period increased to Rs 3,069.26 crore from Rs 2,870.6 crore.

Also read - Medplus Health IPO | Grey market premium up 38% ahead of the launch

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