Wellness Forever looks to raise ₹1,600 crore through IPO

Retail pharmacy Wellness Forever Medicare Limited is the latest in a string of healthcare companies looking to tap the capital market, in an effort to raise about ₹1,600 crore to fuel growth, according to market-insiders.

The Adar Poonawalla-backed company has filed a draft red herring prospectus (DRHP) with market regulator SEBI to raise funds through an initial public offering (IPO). This makes it the second pharmacy chain to file for an IPO after Hyderabad’s MedPlus which did the same in August, industry representatives point out.

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The Mumbai-based Wellness Forever was founded by Ashraf Biran, Gulshan Bakhtiani and Mohan Chavan in 2008 and is largely active in the western region of the country.

Fresh issue worth ₹400 crore

The proposed IPO involves a fresh issue of equity shares aggregating to ₹400 crore and an offer for sale of up to 1.60 crore equity shares. As a part of the 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 the funds raised to support new outlets (₹70.20 crore), repayment and prepayment of certain borrowings (₹100 crore) and funding of working capital requirements (₹121.90 crore), besides other corporate purposes.

Rising revenue

The pharmacy chain’s revenue for the financial year ended March 31, 2021, grew to ₹924.02 crore from ₹863.25 crore in the previous fiscal year. And as of June 30, 2021, the network serves a registered customer base of 6.7 million customers.

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Its pharmacy stores, mostly run round the clock, grew from 144 in March 2019 to 236 stores across 23 cities in Maharashtra, Goa and Karnataka employing more than 4,600 people.

The merchandise on offer at the stores include 91,500 pharmaceutical and wellness products, and each of its stores features an average of approximately 13,000 products per store, including fast-moving consumer goods, health goods, nutraceuticals and medical equipment, among other products, alongside over-the-counter and prescription medicines.

IIFL Securities Limited, Ambit Private Limited, DAM Capital Advisors Limited, and HDFC Bank Limited are book running lead managers to the issue.