Wellness Forever files for IPO leading to Serum Institute selling bulk of its stake


Wellness Forever Medicare Ltd, an omni-channel retail pharmacy chain backed by Adar Poonawalla, has filed for an initial public offering (IPO) which will see its shareholder Serum Institute of India sell most of its shares. 

The IPO will consist of a fresh issue of Rs 400 crore and an offer for sale of up to 16.04 million shares from existing shareholders and promoters. Serum Institute of India, which owns 13.2% stake in the business, is selling the bulk of its stake, up to 35.5 lakh shares, in the IPO. 

Serum’s chief executive officer Adar Poonawala is also selling up to 15.2 lakh shares through his  entity Rising Sun Holdings.  After the issue, Serum Institute will own only 40,000 shares.

Wellness Forever was founded by Ashraf Biran, Gulshan Bakhtiani and Mohan Chavan in 2008. 

Biran and Bakhtiani are selling up to 7.20 lakh shares each while Chavan is selling around 12 lakh shares.   

The Mumbai-based Allana Group, which owns 6.67% stake, is selling approximately  half of its holding in the company.  

Allana Group exports processed food products and agricultural commodities, including frozen meat, processed and frozen fruit and vegetable products, coffee, spices and cereals. 

Amit Patni ( the cofounder of Patni Computers which sold to iGate) is selling 3 lakh shares via Raay Global Investments. Investor Rajiv Dadlani is selling approximately 5.22 lakh shares. 

The company will use approximately Rs 70.20 crore from the IPO proceeds for capital expenditure and for setting up of new stores.   

As of June 2021, the firm has 236 operational stores in 23 cities across  the Indian states of Maharashtra, Karnataka and Goa serving a registered customer base of 6.7 million customers. 

The Mumbai-based firm will use Rs 100 crore for repayment of debt.  As of August 2021, it has consolidated outstanding borrowings at Rs 153.78 crore. 

The firm will also use Rs 121.90 crore from proceeds for funding incremental working capital requirement. As of August 2021, its fund based and non-fund based working capital facilities were at Rs 97.07 crore and Rs 3.49 crore respectively. 

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

For fiscal year 2021, its total income stood at Rs 941.36 crore against Rs 867.10 crore a year ago. Net loss for the period widened to Rs 34.85 crore versus Rs 5.32 crore last year. 

Wellness Forever is the third largest retail pharmacy and wellness network by number of stores, with a leading position in Western India in terms of total revenues, it says.  

The firm operates a large omni-channel, hyperlocal retail network under its “Wellness Forever” brand and offers an assortment of merchandise comprising approximately 91,500 pharmaceutical and wellness products, according to its DRHP.

Categories: Venture Capital

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