wordpress blog stats
Connect with us

Hi, what are you looking for?

Reliance Retail buys NetMeds, acquires majority stake in parent firm for ₹620 crore

Update on August 20: The All India Organisation of Druggists & Chemists, which has consistently opposed the functioning of e-pharmacies, has said in an open letter to Mukesh Ambani, that it is disheartening to see that Reliance invest in an industry which is illegal and not recognised under the Drugs & Cosmetics Act. 

*

The online pharmacy space, which the government is yet to give regulatory certainty on, is consolidating with Reliance Industries buying a majority stake in Chennai-based online pharmacy NetMeds, and the merger of two existing e-pharmacies MedLife and PharmEasy.

Reliance’s acquisition of NetMeds

Reliance Retail has bought a 60% equity stake in Vitalic Health, the parent company of online pharmacy NetMeds, for ₹620 crore, as it moves closer to competing with e-commerce giant Amazon.

  • The deal grants Reliance Retail 100% ownership of Vitalic’s subsidiaries NetMeds Marketplace, Tresara Health, and Dadha Pharma Distribution.
  • Like Jio Platforms, Reliance Retail is a subsidiary of Reliance Industries Ltd. Over the past few months, Google, Facebook, and roughly a dozen other companies have invested in Jio Platforms.
  • Vitalic’s FY20 turnover amounted to a net loss of ₹184.3 crore, while NetMeds suffered a net loss of ₹164.15 crore. Reliance Retail will further acquire another 20% stake in Vitalic by 2024, with an option to increase it to 100% ownership.

“The aforesaid investment will further enhance affordable availability of essential quality health care products & services by the group, while furthering group’s digital commerce initiatives, with user access across all daily essential needs,” Reliance Industries said in a statement.

The announcement comes days after Amazon announced its entry into the e-pharmacy space with launch of services in Bangalore. Amazon’s entry has already been met with resistance from All India Organisation of Chemists & Druggists, a pan-India association of brick-and-mortar pharmacies. They have declared that e-pharmacies are illegal altogether since current regulations do not permit their operations.

The government has been proposing to bring e-pharmacies into the legal fold since at least August 2018, when they released draft rules for their regulation. However, the rules are yet to be finalised, even despite the courts demanding that the government do so. This could prove to be a hurdle for Reliance Retail as well.

Reliance Retail’s flagship e-commerce venture JioMart was launched just the pandemic accelerated in the country. According to multiple reports, Reliance is also in talks to acquire furniture company Urban Ladder, milk delivery startup MilkBasket, and lingerie company Zivame.

PharmEasy and MedLife merge

Mumbai-based PharmEasy has agreed to merge with rival MedLife, according to filings with the Competition Commission of India (CCI), the Economic Times reported. MediaNama has not independently reviewed the submission. MedLife will reportedly sell 100% shares to API Holdings, PharmEasy’s parent company, in return for 19.59% ownership in the new combined entity, per the report.

Read more:

You May Also Like

News

The Securities and Exchange Board of India has given its go-ahead for Reliance Retail’s acquisition of Future Retail Limited’s retail, logistics and warehousing entities,...

News

The Delhi High Court on Monday refused to stop Amazon from pushing regulators to stop the sale of the Future Group’s businesses to Reliance...

News

Facebook says it will start removing debunked misinformation about the upcoming COVID-19 vaccines in the coming weeks. The removals will be part of Facebook’s...

News

India’s apex drug regulator has granted medical device registration to three wearable devices from GOQii, the California-based fitness technology company. These devices offer measurements...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to Daily Newsletter

    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ