Digital healthcare platform PharmEasy’s parent company API Holding filed for an initial public offering (IPO) of up to Rs 6,250 crore on Tuesday. The issue does not have any offer for sale (OFS) component, which means none of PharmEasy’s existing shareholders would sell their stake in the company as of now. Prosus Ventures, TPG Growth, CDPQ and Temasek are among PharmEasy’s top investors. Their decision to not to cash out during the IPO indicates confidence among PharmEasy’s investors about the growth potential of the company. PharmEasy’s IPO filing comes on a day when fashion e-commerce startup Nykaa listed at 79 per cent premium over its issue price on stock exchanges, while fintech platform Paytm closes subscription prior to its debut. PharmEasy also considering a pre-IPO fundraise via private placement to the tune of Rs 1,250 crore. Once the pre-IPO round is complete, it will reduce the raised amount from the IPO issue size and the minimum issue size would constitute at least 10 per cent of the post-issue paid-up equity share capital of the company. The company has already raised $350 million (Rs 2,635.22 crore) in a fresh equity financing round from a bunch of new investors in October, valuing the firm at $5.6 billion (Rs 42,197.79 crore). The primary funding worth $205 million was secured from new investors, including Singapore-based Amansa Capital, Hong Kong-based hedge fund ApaH Capital, US hedge fund Janus Henderson, OrbiMed, Steadview Capital, Abu Dhabi-based sovereign wealth fund ADQ, New York-based hedge fund Neuberger Berman and London’s Sanne Group. In April, it raised $350 million from Prosus Ventures (formerly Naspers) and TPG Growth at a valuation of $1.5 billion, becoming the first Indian e-pharmacy unicorn. To date, PharmEasy has raised over $1.2 billion in equity and debt funding. In a bid to diversify its operations, the firm had acquired Thyrocare Technologies, India’s largest diagnostic test provider by volumes, in June 2021 for $600 million. In May 2021 it completed the acquisition of smaller rival Medlife to become the country’s largest online pharmacy and healthcare aggregator. In September 2021, the company acquired a majority of Bengaluru based tech focused, healthcare supply chain startup Akna Medical for an undisclosed sum. The proceeds from the fresh issue will be used for prepayment or repayment of outstanding debt to the tune of Rs 1,929 crore. It will use Rs 1,259 crore for funding organic growth initiatives while another Rs 1,500 crore on inorganic growth opportunities through acquisitions and other strategic initiatives. Kotak Mahindra Capital Company Ltd, Morgan Stanley India Company Private Ltd, BoFA Securities India Limited, Citigroup Global Markets India Private Ltd, JM Financial Ltd are bankers to the public issue. Founded in 2015 by Sheth and Shah, PharmEasy merged with its investor entity, Ascent Health, to form API Holdings in 2019. The five founders of API Holdings, Siddharth, Hardik, Harsh, Dharmil and Dhaval are childhood friends, commonly referred to as the ‘Ghatkopar Gang’, as they all grew up in the suburb of Ghatkopar in Mumbai. According to a RedSeer Report, API Holdings is India’s largest digital healthcare platform based on gross merchant value (GMV) of products and services sold for the year ended March 31, 2021. It is an integrated, end-to-end business that aims to provide solutions for healthcare needs of consumers providing digital tools and information on illness and wellness, offering teleconsultation, offering diagnostics and radiology tests, and delivering treatment protocols including products and devices.
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