Source: Moneycontrol
Medikabazaar, one of India’s largest B2B players of the medical supplies market, said it has generated ₹1,355 crore in gross revenue for the fiscal year 2023-24 (FY24). The company has made vital strides in a recovery following a tumultuous year of financial scrutiny, leadership transitions, and problems with governance.
Background
Medikabazaar provides hospitals and healthcare providers with medical apparatus and supplies through its online platform. The company has been growing rapidly in the previous several years, having previously claimed revenue of ₹1,552 crore for FY23 – nearly three times higher than its ₹564 crore revenue for FY22.
However, when a whistleblower contested various financial practices at the company a situation changed – PwC was engaged to conduct a forensic audit, which uncovered several irregularities.
Audit Findings
Medikabazaar’s audit by PwC found that it had overstated its business numbers, analyzing that it doubled the gross merchandise value (GMV) by at least 60%. In the audit report, analysts also found signs of round-tripping, which is moving the same money in different accounts to make the business seem more profitable. PwC also found evidence that some related party transactions were not accounted for correctly.
These serious findings called into question the business’ accounting practices and resulted in two major changes – management and business practices.
A Fresh Beginning
Medikabazaar has overcome numerous challenges, and its most recent revenue report for FY24 shows that it remains a significant player in the healthcare supply industry with its annual revenue of ₹1,355 crore, customers in over 20,000 pin codes across India, and brand equity among hospitals and clinics.
The company states that it will pursue a greater focus on stronger internal controls, improved corporate governance and sustainability. Now that a new leadership group is formed, and lessons learned from last year, Medikabazaar is hoping to move ahead with increased accountability and renewed confidence.
The Mumbai-based company also generated ₹51.3 crore from interest earned on fixed deposits, non-current investments, and bonds, bringing its total revenue for the fiscal year ending March 2024 to ₹1,407 crore.
This was a step in support of the company toward rebuilding trust and fostering transparency. In view of the audit findings made above, co-founder and CEO Vivek Tiwari resigned from his operational position and continues to serve as a non-executive director.
To bolster its management team, Medikabazaar appointed Raman Chawla to the role of Chief Financial Officer. Chawla has a work history with Campus Activewear and Reckitt Benckiser. The company also retained Ravishankar Gopalakrishnan, an executive formerly of Jet Airways and GE Healthcare, to join Medikabazaar as the new Chief Operating Officer and full-time board member.
