PharmEasy's INR 6,250 Crore IPO gets SEBI Approval
The Securities and Exchange Board of India (SEBI) has given permission to API Holdings, the parent company of epharmacy behemoth PharmEasy, to acquire funds through an Initial Public Offering (IPO).
The IPO is expected to garner INR 6,250 crore for the business.
The IPO of the drugstore behemoth will be conducted entirely through primary share sales, with no Offer For Sale (OFS) component. This effectively means that current owners in the firm will not sell their shares.
API Holdings submitted its Draft Red Herring Prospectus (DRHP) with SEBI in November of last year, and this comes months later.
The net funds will be used to retire or settle the startup's existing debt of INR 1,929 crore. The money would also be utilised to finance organic growth projects of INR 1,259 crore. In addition, the money would enable PharmEasy to pursue inorganic development through acquisitions and other activities, totaling INR 1,500 crore.
With the approval from SEBI, the business must now decide whether to postpone the IPO or 'readjust' its value. Last week, it was reported that the epharmacy business was 'reconsidering' its initial public offering (IPO) due to market volatility, particularly in Indian IT companies.
The approval from SEBI comes at a time when Dalal Street is seeing carnage of publicly traded companies. Paytm reached a new low, falling as much as 2% and losing INR 48,120 crore in market capitalization. On Monday, Zomato began the day on a sour note, with its stock dropping nearly 4%. Nykaa, too, has experienced a big drop, falling 42% from its all-time high on February 21 during intraday trade. CarTrade and PolicyBazaar were two more tech stocks that fell.
Concerns of a US-Russia confrontation, a huge correction in the US public markets, and the possibility of interest-rate rises have all contributed to a major drop in Indian technology equities.
The startup's financial condition has also compounded the matter. In FY 21, API Holdings reported a loss of INR 641.3 crore, up 91 per cent from INR 335.2 crore in FY 20. During the same period, though, the startup's income increased from INR 737.4 Cr to INR 2,360 Cr.
The firm, which was founded in 2015 by Dharmil Sheth and Dr. Dhaval Shah, caters to the chronic care market and provides services such as pharmaceutical delivery, teleconsultations, and diagnostic sample collection.
Since its debut, PharmEasy claims to have partnered with over 60K+ brick-and-mortar pharmacies across India and has supposedly serviced over 20 million patients.
Prosus Ventures, TPG, Amansa Capital, Blackstone-backed hedge fund ApaH Capital, and Janus Henderson, among others, have invested in the business. It's worth noting that in 2019, PharmEasy joined with its investor, Ascent Health, to establish API Holdings. Hardik Dedhia, Siddharth Shah, and Harsh Parekh, the founders of Ascent, joined PharmEasy as cofounders after that.
PharmEasy was last valued at about $5.4 billion, according to publicly accessible information. It most recently secured $323 million in a Series E fundraising round from Prosus Ventures and TPG Growth in April of last year. It became the first Indian epharmacy to join the coveted unicorn club as a result of this.
PharmEasy competes with companies such as Tata-backed 1MG, Amazon Pharmacy, Reliance-owned Netmeds, and Medlife, to name a few.
The IPO is expected to garner INR 6,250 crore for the business.
The IPO of the drugstore behemoth will be conducted entirely through primary share sales, with no Offer For Sale (OFS) component. This effectively means that current owners in the firm will not sell their shares.
API Holdings submitted its Draft Red Herring Prospectus (DRHP) with SEBI in November of last year, and this comes months later.
The net funds will be used to retire or settle the startup's existing debt of INR 1,929 crore. The money would also be utilised to finance organic growth projects of INR 1,259 crore. In addition, the money would enable PharmEasy to pursue inorganic development through acquisitions and other activities, totaling INR 1,500 crore.
With the approval from SEBI, the business must now decide whether to postpone the IPO or 'readjust' its value. Last week, it was reported that the epharmacy business was 'reconsidering' its initial public offering (IPO) due to market volatility, particularly in Indian IT companies.
The approval from SEBI comes at a time when Dalal Street is seeing carnage of publicly traded companies. Paytm reached a new low, falling as much as 2% and losing INR 48,120 crore in market capitalization. On Monday, Zomato began the day on a sour note, with its stock dropping nearly 4%. Nykaa, too, has experienced a big drop, falling 42% from its all-time high on February 21 during intraday trade. CarTrade and PolicyBazaar were two more tech stocks that fell.
Concerns of a US-Russia confrontation, a huge correction in the US public markets, and the possibility of interest-rate rises have all contributed to a major drop in Indian technology equities.
The startup's financial condition has also compounded the matter. In FY 21, API Holdings reported a loss of INR 641.3 crore, up 91 per cent from INR 335.2 crore in FY 20. During the same period, though, the startup's income increased from INR 737.4 Cr to INR 2,360 Cr.
The firm, which was founded in 2015 by Dharmil Sheth and Dr. Dhaval Shah, caters to the chronic care market and provides services such as pharmaceutical delivery, teleconsultations, and diagnostic sample collection.
Since its debut, PharmEasy claims to have partnered with over 60K+ brick-and-mortar pharmacies across India and has supposedly serviced over 20 million patients.
Prosus Ventures, TPG, Amansa Capital, Blackstone-backed hedge fund ApaH Capital, and Janus Henderson, among others, have invested in the business. It's worth noting that in 2019, PharmEasy joined with its investor, Ascent Health, to establish API Holdings. Hardik Dedhia, Siddharth Shah, and Harsh Parekh, the founders of Ascent, joined PharmEasy as cofounders after that.
PharmEasy was last valued at about $5.4 billion, according to publicly accessible information. It most recently secured $323 million in a Series E fundraising round from Prosus Ventures and TPG Growth in April of last year. It became the first Indian epharmacy to join the coveted unicorn club as a result of this.
PharmEasy competes with companies such as Tata-backed 1MG, Amazon Pharmacy, Reliance-owned Netmeds, and Medlife, to name a few.
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