PharmEasy IPO

Last Updated: 11 August 2023 12:02 PM by 5Paisa

PharmEasy’s parent company API Holdings filed a DRHP with SEBI for an IPO worth Rs. 6250 crores. The said IPO was filed on 11th November, 2021 and it will raise funds via fresh equity issuance. 

The company is in talks with its bankers to conduct pre-IPO fundraising through private placement for a total amount of Rs. 1250 crores. This will significantly bring down the main issue size. 

API Holdings held a pre-IPO in October 2021 that closed with an over-subscription from the participants. The list of participants includes names like Singapore-based Amansa Capital, US-based hedge fund Janus Henderson and among others. This activity was priced at US $5.4 billion. 

Citigroup Global Markets India, JM Financial Ltd, Kotak Mahindra Capital, Morgan Stanley India and BoFA Securities India are the book running lead managers to the issue.

Objective of the issue

The IPO proceeds will be used for the following:
•    to prepay or repay an outstanding debt of Rs 1,929 crore
•    to fund organic growth initiatives aggregating to Rs 1,259 crore
•    to pursue inorganic growth through acquisitions and other strategic initiatives totalling Rs 1,500 crore
•    for general corporate purposes
 

API Holding is India’s largest digital healthcare platform (based on GMV of products and services sold for FY21). It operates an integrated, end to end business that aims to provide solutions for healthcare needs of consumers across the following critical stages of providing digital tools and information on illness and wellness, offering teleconsultation, offering diagnostics and radiology tests, and delivering treatment protocols including products and devices.

In 2012, Siddharth Shah, Hardik and Harsh Parekh launched a digital and phone order platform, Dialhealth.com, which offered services like tele-consult, diagnostic lab pick-ups and medical product delivery. Even after offering multiple services only product delivery attracted significant demand, thus offerings other than product delivery were eventually scaled down.

Ascent, founded in 2013, was the solution to the shortcomings of a fragmented supply chain. 

Between 2013 and 2019, Ascent scaled up its distribution presence by acquiring and integrating more than 20 wholesalers across India, and expanded its reach and business.  By December 2018, Ascent had become one of the largest wholesalers of pharmaceutical products in India, and by December 2020, PharmEasy had become the leading online pharmacy in India. Since then, the company has actively invested into its own businesses and undertaken multiple scaled acquisitions of complementary businesses, to enhance capabilities and offerings in digital healthcare for all stakeholders.

The expansive Pan-India supply chain infrastructure includes 82 warehouses, 10,886 warehousing personnel, and cumulative warehousing space of 699,000 sq.ft. This infrastructure currently undertakes 76,000 deliveries daily