Wellness Forever all set to raise Rs1500 crore through IPO, files DHRP

Wellness forever all set to raise Rs1500 crore through IPO, files DHRP

Pharmacy retail in India includes the sale of pharmaceutical products, which include over-the-counter (OTC) drugs and prescription drugs. Along with the same, pharma retail also sells various FMCG products, including nutraceutical products, consumables, and medical devices along with pharmaceutical products and related services. The sector is expected to grow at a cumulative growth rate of 10% over the next 5 years, from an estimated value of INR 1,72,500 Cr in FY 2020.

An increase in consumer awareness and increase in health care expenditure has lead to the healthy growth of the pharmaceutical industry in India. Indian pharmacy retail space offers attractive opportunities for significant growth based on India’s favorable demographic trends, growing disposable income, digitization of the country, higher access to healthcare coverage, and increased overall demand for pharmaceuticals and wellness products. The number of branded pharma  stores are lesser than 10,000, these includes companies like Apollo Pharmacy Private Limited, MedPlus Health Services Private, Wellness Forever Medicare, and Emami Frank Ross Limited.

In this high growth industry, Wellness forever, a multi-channel pharma company, backed by Poonawalla of Serum Institute of India, has filed its red herring prospectus with the securities exchange board of India, for an IPO of Rs 1500 crores, on 1st October 2021. Company was founded in 2008 by Ashraf Biran, Gulshan Bakhtiari, and Mohan Chavan. The company has over 236 stores, which have a presence in 23 cities across Maharashtra, Goa, and Karnataka.

The issue consists of fresh issues and offers for sale. As per the DHRP, IPO consists of a fresh issue of equity shares up to Rs 400 crore and an offer for sale up to 1.60 crore equity shares. No proceeds from the offer for sale will go to the company. Net proceeds from the fresh issue will be utilized for Funding capital expenditure to the tune of Rs70.20crores, repayment of borrowing up to Rs100crores, Working capital requirement to the extent of Rs122rores and other general corporate expenses.

The operating revenue of the company is over Rs9413 million, as per the reports of Fy21 up from Rs8670.99million reported a year ago. However, the company failed to cross the green line and make any profit despite a rise in operating revenue. The net loss of the year was reported at Rs348.47million as n March 2021 against the loss of Rs53.2million reported in the previous financial year. This increase in loss can be attributed to increasing expenses which were reported at Rs9870.26 million in Fy2021, against Rs8712.60 million of expenses reported in FY20. Thus company, the company does have good promoters and has a strong growth prospect due to its ever-growing customer base and diversified product line, but the bottom line of the firm is still in the red. Thus it will be interesting to watch, how the investors take in the company, once it’s up for listing.

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