API Holdings, the parent company of epharmacy unicorn PharmEasy has filed its draft red herring prospectus with market regulator SEBI. PharmEasy will be raising up to INR 6,250 Cr through a fresh issue of shares.
According to the DRHP, epharmacy giant’s existing investors will not be selling any shares in the IPO. The company, however, will look at an option of pre-IPO fundraise of upto INR 1,250 Cr through private placement after consulting with the BRLMs(Book running lead manager).
The pre-IPO placement, if undertaken, will be at a price that will be decided by API Holdings in consultation with BRLMs and will be completed prior to filing the Red Herring Prospectus with the RoC.
“If the Pre-IPO Placement is undertaken, the issue size will be reduced by the amount raised from the Pre-IPO Placement and the minimum issue (the issue so reduced by the amount raised from the Pre-IPO Placement) shall constitute at least 10% of the post-Issue paid-up Equity Share capital of our Company,” the DRHP read.
The company intends to utilise around INR 1,929 Cr of the IPO net proceedings for prepayment or repayment of all or portion of certain outstanding borrowings availed by the company and its subsidiaries.
Around INR 1,259 Cr will be utlised by the firm for organic growth initiatives, whereas, INR 1,500 Cr of the net proceeds will be utilised for inorganic growth through acquisitions and other strategic initiatives.
On the date of filing the prospectus:
- Naspers Ventures held the the largest stake at 12.04% in the company
- Followed by Macritchie Investments Pte at 10.84%
- Surbhi Singh jointly with Universal Trustees Private Limited hold 6.70% stake
- And TPG Growth holds 6.65% stake
- Cofounder, managing director and CEO Siddharth Shah holds 1.32% stake in the company.
Its other investors include Tiger Global, Lightstone, B Capital.
PharmEasy posted a loss of INR 641.3 Cr in March ended FY 21, a 91% increase from INR 335.2 Cr it posted in FY 20.
The company’s revenue soared from INR 737.4 Cr in FY 2020 to INR 2,360 Cr in FY 21, a 220% jump. Likewise, the company’s expenses widened to INR 2,980.9 Cr in FY 21, a 174.8% rise from INR 1,084.4 Cr in FY 20.
In October, the startup bagged $350 Mn in a primary and secondary round. During the pre-IPO round, the startup raised around $204 Mn in a primary round. Amansa Capital, Blackstone-backed hedge fund ApaH Capital, US hedge fund Janus Henderson, OrbiMed, Steadview Capital, Abu Dhabi’s sovereign wealth fund ADQ, hedge fund Neuberger Berman and London’s Sanne Group, participated in the round.
Founded in 2015 by Dharmil Sheth and Dr Dhaval Shah, PharmEasy merged with its investor entity, Ascent Health, to form API Holdings in 2019. This brought in three new cofounders – Siddharth Shah, Hardik Dedhia, and Harsh Parekh.
PharmEasy claims to connect 60K+ brick-and-mortar pharmacies and 4K+ doctors in 16K+ pin codes across India. It also provides SaaS procurement solutions, delivery and logistics support, and credit solutions to pharmacies.
The startup claims to have served over 20 Mn patients since inception.
PharmEasy competes against the likes of Tata-backed 1MG, Reliance acquired Netmeds, Amazon Pharmacy, Medlife among others