Medistep Healthcare
- Medistep Healthcare is coming out with an initial public offering (IPO) of 37,44,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 43 per equity share.
- The issue will open on August 8, 2025 and will close on August 12, 2025.
- The shares will be listed on SME Platform of NSE.
- The share is priced at 4.30 times higher to its face value of Rs 10.
- Book running lead manager to the issue is Fast Track Finsec.
- Compliance Officer for the issue is Sashi Kala Bhutra.
Profile of the company
Medistep Healthcare is a Pharmaceutical Company that has carved a niche in the Healthcare Industry through its in manufacturing Sanitary pads, Energy powder and trading a diverse range of pharmaceutical products, Nutraceutical products, Intimate Products and surgical products through distribution network. Its promoter’s experience and their understanding of the pharmaceutical business will enable it to continue to take advantage of both current and future market opportunities. Its promoters are actively involved in the business with continuous personal attention.
Its core business activity is divided in following category: a) Manufacturing of sanitary pad and energy powder and b) Trading & Distribution of pharmaceutical, nutraceutical, surgical and intimate Care Products. The company is consistent in supplying of quality products round the year. Its products comply with requisite safety standards. It is constantly striving to expand its line of products and it is always looking for complementary products that will add to its range of products.
The company primarily cater to the western region of India, particularly in the cities of Gujarat. Its business involves trading pharmaceutical products by acting as a supply chain consolidator, bridging the gap between distributors and retail pharmacies, medical practitioners, and other healthcare facilities. Additionally, it acts as a distributor / stockiest between manufacturers / distributors and the wholesalers / retailers for other than pharmaceutical products i.e. Nutraceutical Products, Intimate care & Hygiene products and Surgical products and Instruments. Its deliverables include logistics, inventory management, credit and delivery at cost effective prices to the customers. These are critical services that help pharmaceutical manufacturers to efficiently reach their target customers and improve their sales.
Proceed is being used for:
- Meeting capital expenditure for purchasing new plant and machineries for expansion at the existing manufacturing facility
- Meeting working capital requirements of the company
- Meeting general corporate purposes
- Meeting the issue expenses
Industry Overview
The Indian pharmaceutical industry has proved to be the major player in the domestic and international market. This supremacy has been achieved through an enduring process of manufacturing, competitive prices practice, and highly skilled staff. One of the major strategies for Indian pharma sector in terms of growth is its global expansion which is the key driver of this industry's performance. The degree to which Indian pharma progresses towards the international level depends crucially on its flexibility and robustness in the global health arena. This case study shows it the different strategies that the Indian pharmaceutical companies have been using to expand their global reach and the factors that have contributed to the expansion of the industry. The market size of the Indian pharma industry is expected to touch US$ 65 billion by 2024, $130 billion by 2030 and $450 billion by 2047.
Meanwhile, India's nutraceutical market is prepped to be a global leader at $4-5 billion. It is expected to grow approximately $18 billion by 2025. The dietary supplements market in India is valued at $3924.44 million in 2020 and reports say that it will reach $10,198.57 million by 2026 that is 22% growth rate year on year. The ongoing pandemic and the rising importance about preventive healthcare has led to the exponential growth of this sector. Indian population has begun in immunity-boosting supplements and has led to a significant shift in buying patterns and market behaviour. Vitamin capsules, chewable tablets and gummies are examples of the open-minded buying behaviour of consumers of healthcare products.
Sanitary napkins, or sanitary pads, are thin pads made of absorbent materials. They play a vital role in feminine hygiene as they soak the menstrual fluid during menstruation. A sanitary napkin contains four functional components including fluid acquisition layer, distribution component, absorbent structure and liquid impervious membrane. These napkins can be found in different sizes and shapes with varying capacities of absorption. In India, the increasing awareness about menstrual hygiene is supporting the demand for sanitary napkins. Moreover, the utilization of high-quality and environment-friendly raw materials to produce these pads is further providing an impetus to the growth of the market. The Indian sanitary napkin market size reached $758.5 million in 2023. Looking forward, IMARC Group expects the market to reach $1,659.6 Million by 2032, exhibiting a growth rate (CAGR) of 8.8% during 2024-2032.
Pros and strengths
Scalable business model: The company’s business model focuses on customers and is driven by orders. It maximizes the use of its current resources to ensure quality supply and achieve cost savings through economies of scale. It grows by developing new products and entering new markets, meeting customer needs, leveraging marketing expertise, and maintaining consistent quality. This makes its business model scalable.
Wide range of products: The company offers a range of products, including the trading of pharmaceutical and healthcare items, as well as the manufacturing of sanitary pads under the brand DRYSTEP and energy powders, VITASTEP Z.
Experienced promoters and management team: The company’s management team is experienced in the industry in which it is operating and has been responsible for the growth of its operations and financial performance. Its Promoters lead the company with their vision. It has an adequate experience in the line of the business undertaken by the company and look after the strategic as well as day to day business operations. The strength and entrepreneurial vision of its Promoters and management have been instrumental in driving its growth and implementing its strategies. Its motivated team of management complement each other to enable it to deliver high levels of clients.
Risks and concerns
Maximum revenue comes from limited customers: The company has garnered 89.32%, 68.36% and 97.30% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows.
Geographical constrain: The company has only one manufacturing facility. Its manufacturing facility is located in Bareja, Kheda, Gujarat. As it manufactures Sanitary Pad and Energy Powder at its manufacturing unit, its business is dependent on ability to manage its manufacturing facility, which are subject to various operating risks and factors outside its control including, among others, breakdown and/or failure of equipment or industrial accidents which may entail significant repair and maintenance costs, difficulties with production costs and yields, product quality issues, disruption in electrical power or water resources, timely grant or renewal of approvals, severe weather conditions, natural disasters and outbreaks of infectious diseases, political instability, and cooperation of its employees.
Dependent on few suppliers for purchase: The company has purchased 92.98%, 95.33% and 86.63% of its total raw material from top 10 suppliers in FY25, FY24 and FY23 respectively. The company cannot assure that it will be able to get the same quantum and quality of supplies, or any supplies at all, and the loss of supplies from one or more of them may adversely affect its purchases and ultimately its revenue and results of operations. However, the composition and amount of purchase from these suppliers might change as it continues to seek new suppliers for its business operation for better quality and price in the normal course of business. Though it will not face substantial challenges in maintaining its business relationship with them or finding new suppliers, there can be no assurance that it will be able to maintain long term relationships with such suppliers or find new suppliers in time.
Outlook
Medistep Healthcare is a pharmaceutical company producing sanitary pads, energy powder, and various pharmaceutical, nutraceutical, intimate, and surgical products. It is committed to quality and seek to expand their product line as a public, non-government company. The company offers various products, including trading in pharmaceutical and healthcare items, manufacturing DRYSTEP sanitary pads, and VITASTEP Z energy powders. On the concern side, the company is dependent on few numbers of customers for sales. The loss of any of this large customer may affect its revenues and profitability. Moreover, the company provides its goods majorly in Gujarat, any adverse changes in the conditions affecting these regions can adversely affect its business, financial condition and results of operations.
The company is coming out with an IPO of 37,44,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 43 per equity share to mobilize Rs 16.10 crore. On performance front, total revenue from operations for the Financial Year 2024-25, stood at Rs 4965.48 lakh whereas in Financial Year 2023-24 it stood at Rs 3907.19 lakh, representing an increase of 27.09%. Moreover, the restated profit after tax for the Financial Year 2024-25, stood at Rs 414.42 lakh whereas in Financial Year 2023-24 it stood at Rs 332.75 lakh representing an increase of 24.54% in line with profit before tax.
The company operates in a competitive industry. It faces competition in its business from large as well as mid-size corporates. It competes with its competitors on a regional or product line basis. The principal factors affecting competition in its business include relative quality, client relationships, reputation, the abilities of employees, market focus, timely delivery and price of the services and products. Its cost-effective and integrated offerings, its focus on customer satisfaction and its reliability combined with its quality consciousness provides it with competitive advantage in its business. It has strong networks of hospitals, medical practitioners, retail pharmacies and distributors/stockists. The company has a plan to manufacture different multivitamin tablets like Iron tablet, calcium tablet, B complex tablet, B12 tablet, etc. It will invest in a social media for branding and marketing. The company will utilize customer feedback and testimonials to build trust and credibility. Positive reviews and word-of-mouth recommendations can significantly influence purchasing decisions.
