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PharmEasy parent API Holdings files papers for Rs 6,250-cr IPO

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PharmEasy has filed preliminary papers with Sebi to raise Rs 6,250 crore through an initial share sale. The company plans to utilise the net proceeds to prepay or repay outstanding debt of Rs 1,929 crore, fund organic growth initiatives totalling to Rs 1,259 crore, pursue inorganic growth through acquisitions and other strategic initiatives aggregating to Rs 1,500 crore, and for general corporate purposes.

PharmEasy parent API Holdings files papers for Rs 6,250-cr IPO
PharmEasy parent firm API Holdings has filed preliminary papers with capital markets regulator Sebi for a public listing to raise over Rs 6,250 crore via an initial share sale. The digital pharmacy and healthcare platform has become the latest among a list of Indian startups to pursue share market listing this year.
The funds will be raised through the fresh issuance of equity shares, according to PharmEasy's draft red herring prospectus (DRHP). The company may also consider a pre-IPO fundraise of about Rs 1,250 crore before it files the red herring prospectus with the Registrar of Companies (RoC). If the round takes place, the size of the IPO will be reduced.
API Holdings with subsidiaries like PharmEasy and Thyrocare provides health services ranging from radiology tests, teleconsultation, and home delivery of medical devices and products. The firm had acquired Thyrocare, India's largest diagnostic test provider, earlier this year.


It intends to use the funds raised from the issue to prepay and repay outstanding borrowings availed by the parent and subsidiary firms. It also intends to use Rs 1,259 crore to fund organic growth initiatives. It has set aside Rs 1,500 crore for inorganic growth opportunities via acquisitions and other strategic actions.
The company will focus on core areas of growth like marketing and promotional activities to increase brand awareness, supply chain infrastructure, and technology capabilities, it said in the DRHP.
DRHP or draft red herring prospectus is a preliminary registration document filed with the markets regulator SEBI to raise funds via the book-building process. It mentions why the company wants to raise money and how it intends to use the money. It also contains the risks involved.
PharmEasy's revenue from operations stood at Rs 2,335 crore for the financial year 21, jumping from Rs 668 crore in the previous year. However, the revenue declined for the first quarter of FY22 to Rs 1,197 crore.
Its net loss in FY21 was Rs 645 crore, up from Rs 335 crore in FY20. In the quarter ended June 2021, its losses declined to Rs 314 crore. Its pro forma gross merchandise value (GMV) stood at Rs 787 crore in FY21 and declined to Rs 303 crore in Q1 FY22.
GMV is the total value of merchandise sold over a given period. While pro forma GMV means the company is excluding anything it believes can obscure the accuracy of its financial outlook. It is a useful tidbit of information to assess the future aspects of a company.
API Holdings' pro forma GMV includes the contribution from its acquisitions of Medlife, Ascent, Aknamed, and Thyrocare as if these were acquired on April 1, 2020.
Among its investors are private-equity firm TPG, tech-focused venture capital firm Naspers, and entities related to global investment group CDPQ.
Citigroup Global Markets India, JM Financial Ltd, Kotak Mahindra Capital, Morgan Stanley India and BoFA Securities India are joint book runners in API Holdings' IPO.
With this listing, PharmEasy will join the likes of Nykaa, Zomato, Paytm, and PolicyBazaar — the new-age companies looking to list on Indian stock exchanges.
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