Adar Poonawalla-backed Wellness Forever Medicare Limited, an Omni-channel retail pharmacy has filed a Draft Red Herring Prospectus (DRHP) with market regulator SEBI to raise funds through an initial public offering (IPO).According to market sources, the expected fund raise would be between Rs 1500-1600 crore.
The company will be the second pharmacy chain to file for an IPO after Hyderabad-based MedPlus who filed its DRHP with the Securities and Exchange Board of India in August.
The IPO consists of a fresh issue of equity shares aggregating to Rs 400 crore and an offer for sale up to 1.60 crore equity shares, according to DRHP As a part of OFS, up to 7.20 lakh shares each are on offer by Ashraf Mohammed Biran and Gulshan Haresh Bhahtiani, up to 1.20 lakh shares by Mohan Ganpat Chavan and up to 144.85 lakh shares by other existing shareholders.
The company proposes to utilise net proceeds from the fresh issue to the tune of Rs 70.20 crore for funding capital expenditure for setting up new outlets, repayment/prepayment in part or full of certain borrowings amounting to Rs 100 cr, funding its working capital requirements to the extent of Rs 121.90 cr besides general corporate purposes.
The Mumbai-based brand Wellness Forever founded by Ashraf Biran, Gulshan Bakhtiani and Mohan Chavan in 2008, leads in western India and is the country's third-largest retail pharmacy and wellness network in terms of number of stores. Its pharmacy stores, mostly 24x7, provide a self-browsing and differentiated shopping experience. Its store network grew from 144 stores in March 2019 to now 236 stores, which has presence in 23 cities across Maharashtra, Goa and Karnataka, employing more than 4,600 people.
It offers a wide assortment of merchandise comprising approximately 91,500 pharmaceutical and wellness products, and each of its stores feature an average of approximately 13,000 products per store, including fast-moving consumer goods ("FMCG"), fast-moving health goods ("FMHG"), nutraceuticals and medical equipment, among other products, alongside over-the-counter and prescription medicines.
As of June 30, 2021, it serves a registered customer base of 6.7 million customers. According to a report by Technopak attributed in its DRHP, the company generated the highest revenue per retail square foot in the Indian pharmaceutical retail industry for two fiscal years in a row, 2020 and 2021. It intends to deepen its penetration in tier 2 and 3 markets besides participating actively in the growing pharmacy e-commerce segment which is expected to grow at a 45% CAGR Y-o-Y.
The pharmacy chain's revenue for the financial year ended March 31, 2021, grew to Rs 924.02 crore, from Rs 863.25 crore in the previous fiscal year.
IIFL Securities Limited, Ambit Private Limited, DAM Capital Advisors Limited, and HDFC Bank Limited are book running lead managers to the issue.