Online medicine pharmacy - MedPlus and the public market promised land.. If you've ever felt like you didn't get something you deserved, spare a thought for Madhukar Gangadi.
Gangadi, the promoter and CEO of pharmacy chain MedPlus, built a sprawling business over the past 15 years. Today, MedPlus is India's second largest pharmacy chain—both in terms of number of outlets and revenue. Crucially, in a world where capital is burnt with reckless abandon at the altar of growth, Gangadi kept one eye firmly on sustainability. Unlike many of its rivals—both online and offline—MedPlus has been profitable for a few years now. It employs some 15,000 people, and has operations across seven Indian states.
For all of this, Gangadi has received little love from VC or PE investors. In the past, he's had to borrow as much as Rs 750 crore to provide exits to investors, and even allegedly explored a sale of MedPlus to finance this debt.
His company, despite its size, is valued at around $400 million. This seems respectable, until you realise its online-first rival PharmEasy is valued at 10X that, and has raised nearly $650 million since April.
What's the problem with MedPlus? It depends on who you ask. For some, it's the promoter's debt. For others, it's not digital enough (despite being the first Indian pharmacy with an online channel).
Still others worry about the intense competition in the space. Or the lack of revenue growth during the pandemic. It shouldn't come as a surprise then that Gangadi is done with the private markets. Last month, MedPlus filed its Draft Red Herring Prospectus for a Rs 1,600 crore IPO. The hope is that finally, MedPlus and Gangadi will get their due.
