Wellness Forever delays market debut

This is primarily due to market volatility driven by geopolitical issues

Adar Poonawalla-backed retail pharmacy chain Wellness Forever has pushed its listing plans to July due to the market volatility driven by geopolitical issues.

The company, which got Sebi’s nod in February for its initial public offering, will be the second pharmacy chain to go public after Medplus. It had originally planned to list in March.

“The Russia-Ukraine war has impacted markets globally. It would be foolish to think that it will not impact us. It has been keeping the markets volatile. These are reasons one has to consider before listing. Therefore, I feel by July hopefully markets will be favourable for us to list. We are not in a hurry,” the company promoter, Ashraf Biran, told DH.

With the IPO, Poonawalla will make a partial exit from the company.

According to the draft IPO papers, Wellness Forever’s losses widened to Rs 34.85 crore in the financial year that ended March 31, 2021, from Rs 5.3 crore in the year-ago period.

Biran blamed the poor performance on the pandemic.

“Elective surgeries were not happening at hospitals. Pharmacies were not operational at hospitals. These are some of the factors that have led to the increasing losses,” he said, adding that the pharmacy chain hopes to become “EBITDA positive” this year. EBITDA refers to earnings before interest, taxes, depreciation, and amortisation.

“We need to grow our business. We are trying to be a hyperlocal omnichannel business which needs good tech and team, which is why we are putting money on our tech and human resources,” he said.

Anubhav Srivastava, a partner at Infinity Alternatives, said the pharmacy chain could struggle to find new investors.

"Whether a company can deliver in the future is usually the market's concern so it may not make a difference if it is a loss-making firm. But this firm does not appear to have a distinguishing feature other than its network of 300 hybrid pharma/general stores," he said, adding that the lack of investor interest could also be because of a glut of IPOs in the market.