Pharmacy chain MedPlus eyes $75M funding to add 2,000 stores

Hyderabad-based pharmacy chain MedPlus eyes funding of up to $75 million to expand base and penetrate into new geographies, a top company executive told VCCircle.

“We are looking to raising $50-75 million as we wish to start our next phase of expansion. We will start the fundraising in a month. We have the platform and processes in place and are ready to expand rapidly,” said Madhukar Gangadi, chief executive officer of MedPlus.

The fundraising will be in addition to a secondary stake sale by its existing investors, he said.

Mint first reported the development.

The firm currently has 1,244 pharmacy retail outlets in 12 states and will be adding 200 outlets this year. “We want to add around 1,500-2,000 outlets next year and that is why we are raising funds,” said Gangadi.

As per its expansion plans, the firm would be looking at entering north and west India besides adding more outlets to its current geographies—Hyderabad, Bengaluru and Chennai—which have 200 outlets each. Earlier this month, MedPlus entered the Gujarat market by setting up 11 outlets.

It would be taking the franchise route to expand. “As of now 98 per cent of our outlets are self owned but going ahead we are looking at adopting a franchise model,” said Gangadi.

It has a hub-and-spoke model where it sets up a warehouse and places its stores around it.

Private equity investors such as US-based Mount Kellett Capital Management, TVS Capital Funds Ltd and Piramal Group-backed India Venture Advisors Pvt Ltd are existing investors in MedPlus.

These PE firms together hold approximately 34 per cent stake in the company which they acquired through Bahrain-based Arcapita Bank for $90 million, in 2011.

Its businesses include MedPlus Pathlabs, a chain of diagnostic centres; RiteCure, a medical and surgical supplies distributor and, its online medical store.

MedPlus is hoping to close FY15 with revenues of Rs 1,400 crore.

(Edited by Joby Puthuparampil Johnson)

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