India’s MedPlus Plans IPO, Seeks $300 Million

MedPlus of India, an omnichannel retailer with over 1,800 stores, is planning an initial public offering (IPO) with a goal of raising 2,000 crore rupees, or about $300 million, Money Control reported.

Based in Hyderabad, MedPlus also operates the online store MedPlus, lab centers MedPlus Pathlabs and surgical equipment distribution business RiteCure. Backers of the pharmacy chain, India’s second largest in terms of the number of stores, include: private-equity firm Warburg Pincus and Premji Invest.

The plan is to prepare to launch an IPO in 2021, sources told Money Control. India is now reeling from a surge in COVID-19 cases — which has led to a surge in demand for pandemic-related products and rewarded pharmacies, particularly ones with an online presence.

“The IPO will be a combination of primary and secondary issue of shares and will help to provide a partial exit to investors like Warburg Pincus and Premji Invest,” one source told Money Control.

“MedPlus has recently shortlisted Axis Capital, Nomura and Edelweiss Financial Services,” said another source. “They are likely to select a fourth investment bank soon.”

Another source said that while the plan as of now is to raise around Rs 1,800 crores to Rs 2,000 crores through the IPO, that target may increase depending on valuations.

The company had been focused largely on southern India, but has since expanded to other parts of India. MedPlus could become India’s first listed retail pharmacy chain, said Money Control.

Despite the COVID surge, India is in the midst of an IPO boom. By late March, Indian companies had raised more than $2 billion from IPOs — the highest level of such funding since 2008.

Reuters reported that 2020 saw companies in India raise $9.2 billion from IPOs. That put India in third place behind the U.S. and China.

“If you want to be in Asia, but don’t want all your eggs in one basket — the China basket — India is the easiest option to go for. It’s large, liquid, and has a low correlation with China,” Herald van der Linde, head of Asia equity strategy at HSBC, told Reuters.