Malaysia's Largest Pharmacy Chain Plans $565 Million IPO

The largest pharmacy chain in Malaysia, Big Caring Group Bhd., is offering shares worth up to 2.3 billion ringgit ($565 million) as part of an IPO, which is set to be the second largest in the country this year, according to Bloomberg.

The price is 1.08 ringgit per share, valuing Big Caring at 8 billion ringgit upon listing, according to the prospectus published on Thursday. The offering covers 2.1 billion shares, including an over-allotment option. The listing on the main market of Bursa Malaysia is scheduled for November 19.

Market Context

The offering takes place amid the expansion of pharmacy chains in response to growing demand for medicines and health products in Malaysia. The country leads Southeast Asia in funds raised through IPOs this year, with over 40 offerings, according to Bloomberg.

The deal is second only to the IPO of Sunway Healthcare Holdings Bhd. at 2.86 billion ringgit in March, the largest in Malaysia in nine years; including the option, Sunway raised about 3.28 billion ringgit.

Structure and Metrics

Investment company Creador, through IPSB, will reduce its stake from 33.7% to 19.3% after the IPO, or to 16.3% if the option is fully exercised. The founders' holding, Uptown Paradise, will also sell shares, reducing its stake from 42.9% to 34.4%. For Creador, this will be the largest IPO in Malaysia, surpassing the MR DIY chain.

Big Caring will use 570.7 million ringgit of the proceeds to repay bank loans and 30 million to build a distribution center.

The company grew from the Big Pharmacy chain: the first pharmacy was opened by Lee Meng Chuan and his wife Lim Xin Yin in 2006. In 2023, the group acquired Caring Pharmacy from 7-Eleven Malaysia Holdings and has since grown to 668 retail outlets, of which 660 are licensed pharmacies. The group is also involved in manufacturing, distribution, e-commerce, and medical services.

For the fiscal year ended June 30, net profit rose 57% to 191.6 million ringgit, and revenue increased 18% to 4.02 billion ringgit.