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 Rs400 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 (cofounder of Patni Computers which was 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 Rs70.20 crore from the IPO proceeds for capital expenditure and for setting up of new stores.

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

The Mumbai-based firm will use Rs100 crore for repayment of debt. As of August 2021, it has consolidated outstanding borrowings at Rs153.78 crore.

The firm will also use Rs121.90 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 Rs97.07 crore and Rs3.49 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 Rs941.36 crore against Rs867.10 crore a year ago. Net loss for the period widened to Rs34.85 crore versus Rs5.32 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.