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API Holdings (PharmEasy) IPO - 7 Things to Know

API Holdings (PharmEasy) IPO - 7 Things to Know
by 5paisa Research Team 20/11/2021

Over the last few months, a number of extremely popular digital brands have hit the market and these include Zomato, Paytm, Nykaa and Policybazaar. One more such unicorn to tap the IPO market is API Holding Ltd. While the name of the parent company may not be well known, its online brand, PharmEasy, is one of the most popular retail brands.
 

Seven things to know about the API Holdings (PharmEasy) IPO


1. PharmEasy has already filed its draft red herring prospectus with SEBI for its proposed Rs.6,250 crore IPO. The entire issue will be by way of fresh issue and the promoters or the early investors do not intent to dilute their existing holdings, although their stake would reduce overall due expansion of the capital base.

2. As one of India’s leading digital pharmaceutical platforms, API Holdings (PharmEasy) has marquee investors on its roster including Prosus Ventures, TPG Growth, Temasek, CPDQ, LGT Lightrock, Eight Roads and Think Investments. Existing shareholders are not reducing their holdings at this point of time.

3. Out of the fresh issue of Rs.6,250 crore proposed to be raised in the IPO, API Holdings (PharmEasy) would look to raise around Rs.1,250 crore via private placement as part of its pre-IPO fund raising.

Check - PharmEasy parent API Files for DRHP for IPO

If that round is successful, the final size of the IPO would be reduced to that extent. This would be done post the SEBI approval and before RHP filing.

4. API Holdings (PharmEasy) has identified the applications of its fresh funds. It will use Rs.1,930 crore for reducing its current debt. In addition, the company will use Rs.1,260 crore to fund organic expansions and another Rs.1,500 crore to fund its inorganic expansions via niche mergers and acquisitions as opportunities arise.

5. Interestingly, API Holdings (PharmEasy) has seen its revenues grow exponentially on YoY basis. Between FY20 and FY21, total revenues of PharmEasy grew 3.5 times to Rs.2,335 crore.

The company has already reported revenues of Rs.1,197 crore in the Jun-21 quarter, so FY22 promises to be another year of heady growth in the top line.

6. API Holdings (PharmEasy) reported net loss of Rs.645 crore in FY21, nearly twice the losses in the previous year. It has already reported Rs.335 crore loss in Q1 so FY22 promises wider losses.

However, what matters in this business is the gross merchandise value (GMV), which has grown 2.5 times at Rs.787 crore in FY21.

7. The issue will be lead managed by Kotak Mahindra Capital, Morgan Stanley, BOFA Securities, Citigroup Global and JM Financial who will joint act as the book running lead managers to the issue.

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Veranda Learning Solutions IPO - 7 Things to Know About

Veranda Learning Solutions IPO - 7 Things to Know About
by 5paisa Research Team 20/11/2021

One of the big success stories during the pandemic has been the online learning companies. Big names like Byju’s, Simplilearn and Vedantu have all seen their valuations grow manifold as students across the board increasingly opted for online learning. One more company from the online learning fold tapping the IPO market is Veranda Learning Solutions Ltd.
 

Here are Seven things to know about Veranda Learning Solutions IPO


1. Veranda Learning Solutions Ltd has filed preliminary papers (DRHP) with SEBI for its proposed IPO. The IPO size is small at just around Rs.200 crore and the issue will be entirely by way of a fresh issue of funds.

Thus fresh funds will come into the company and there will also be overall equity dilution.

2. Veranda is also considering a private placement of shares worth Rs.50 crore. This exercise will be taken up after the SEBI approval comes through and before filing the RHP with the Registrar of Companies.

If the pre-IPO placement is successful, then the company will reduce the size of its IPO to that extent.

3. The proceeds of the IPO will be used for repaying its debt and also retiring the acquisition consideration of Edureka. This was an acquisition made by Veranda in the month of September 2021 to supplement its learning offerings online and offer it to a much wider international audience.

4. In September this year, Veranda Learning Solutions acquired 100% in Brain4ce Education Solutions from Edureka. As per the share purchase agreement signed with Edureka, the acquisition will allow Veranda Learning Solutions to expand its learning content offerings on the software education front to the US and also to the UK.

5. Veranda provides its services through four subsidiaries. Veranda Race Learning Solutions is into digital software training. Veranda XL Learning Solutions offers the most comprehensive Chartered Accountancy training for intermediate and final levels.

Veranda IAS Learning Solutions is aimed at aspiring IAS officers while Brain4ce Education Solutions, is the Edureka acquisition for the global markets of US and UK.

6. Veranda has a wide business matrix offering its palate of learning solutions to students, professionals and corporate employees.

The training courses have long-term and short-term preparatory courses to prepare for UPSC Exams, SPSC exams, Staff Selection Commission, Banking, Insurance, Railways and Chartered Accountancy.

7. The issue will be lead managed by Mumbai based Systematix Corporate Services. The size of the IPO is quite small but online learning is one of the fastest growing and robust business models currently in India.

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Five Star Business Finance IPO - 7 Things to Know

Five Star Business Finance IPO - 7 Things to Know
by 5paisa Research Team 20/11/2021

Chennai based Five Star Business Finance Ltd has filed its DRHP with SEBI for its proposed IPO. The Rs.2,752 crore IPO will entirely be an offer for sale by the existing shareholders.

Hence, there will be no fresh funds coming and no dilution of equity. The intent of the IPO is to list the stock for greater visibility and also as a potential future currency.
 

Here are seven things to know about the Five Star Business Finance IPO


1. The Rs.2,752 crore IPO of Five Star Business Finance will entirely be by way of offer for sale. Five Star Business Finance was originally set up as an NBFC in the year 1984 and caters to the small lending segment in the market, with focus on entrepreneurs and self-employed persons.

2. Currently, over 54% of Five Star Business Finance is held by 4 major PE investors. For instances TPG Asia holds 20.99% while Matrix Partners holds 14%.

Among other key investors, Norwest Venture owns 10.22% in Five Star Business Finance while SCI Investments holds a significant 8.83% stake in the company.

3. Most of the large holders will participate in the OFS to partially monetize their stake. Out of the total Rs.2,752 crore OFS, TPG Asia will sell Rs.1,350 crore, Matrix Partners will sell Rs.568 crore, Norwest Ventures Rs.386 crore and SCI Investments Rs.257 crore.

Promoters entities will sell around Rs.181 crore between them in the OFS.

4. Five Star Business Finance is based out Chennai and has leadership focus in South India. Since 2005, it provides secured business loans to small entrepreneurs and self-employed individuals, outside the purview of existing banks and financial institutions.

Most loans are secured by self-occupied residential property to reduce chances of default.

5. Five Star witnessed enviable growth . It has growth in last 2 years from 173 branches to 268 branches. Over last 4 years, live accounts have grown 12-fold to 1.92 lakhs.

While Five Star has presence in 8 states and 126 districts, nearly 95% of its portfolio is located in the 4 states of Tamil Nadu, Karnataka, Andhra Pradesh and Telangana.

6. Financial numbers have also been impressive for Five Star. For FY21, total income grew 34% at Rs.1,051 crore while net profits were up 37% at Rs.359 crore. Its assets under management or AUM currently stands at Rs.4,445 crore and has grown at a CAGR of 86% in last 5 years.

7. The IPO will be lead managed by ICICI Securities, Kotak Mahindra Capital, Edelweiss Financial and Nomura Financial Advisory, as book running lead managers.

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Droom Technology IPO - 7 Things to Know About

Droom Technology IPO - 7 Things to Know About
by 5paisa Research Team 20/11/2021

Like CarTrade, which had listed on the stock exchanges post its IPO about 3 months back, Droom Technology is also a reputed agnostic platform to buy and sells cars and bikes. Droom Technologies has now filed its DRHP with SEBI for its proposed IPO.
 

Here are seven interesting facts to know about Droom Technology IPO


1. Droom Technology is planning an IPO of Rs.3,000 crore comprising of a fresh issue of Rs.2,000 crore and an offer for sale of Rs.1,000 crore.

Droom is a digital start-up that offers an agnostic platform for buyers to leverage content, comparison and commerce.

2. Currently, the promoters, Sandeep Agarwal and Droom Pte Ltd, Singapore jointly hold 100% stake in Droom Technology. Droom will also look at a pre-IPO placement of Rs.400 crore ahead of the IPO, in which case the size of the IPO size would also be reduced proportionately.

Anchor placement will be done closer to the IPO opening. 

3. Founded in the year 2014, Droom counts amongst its key competitors, names like CarTrade, Cars24, CarDekho, Spinny etc. Of these only CarTrade is listed.

However, CarTrade did disappoint post its listing and still quotes at about 30% discount to the issue price. That could be an overhang for Droom Technology.

Check - Droom Files DRHP for Rs.3,000 crore IPO

4. While the promoters, Droom Pte Ltd and Sandeep Agarwal, will participate in the offer for sale of Rs.1,000 crore, the fresh issue funds of Rs.2,000 crore will be deployed towards organic and inorganic initiatives.

Apart from expanding its presence and reach organically, Droom will also look at niche mergers and acquisitions in the space.

5. Droom has already raised funding twice in the past. In the first round, Droom raised $125 million from investors like Lightbox, Beenext, Digital Garage, Integrated Asset Management, Toyota Tsusho Corp etc.

In Jul-21, Droom also raised $200 million from some of the old investors and new investors like 57 stars and Seven Train Ventures.

6. The second hand car market has picked up solid traction in the last few years and a digital market place is the best fit. Most of the major agnostic automobile commerce portals report huge number of page view and  footfalls.

This is likely to assure rapid growth for the coming quarters.

7. The public issue of Droom Technology will be lead managed by ICICI Securities, Axis Capital, Edelweiss Financial, HSBC Securities and Nomura Financial Advisory as the book running lead manages to the issue.

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e-Mudhra IPO - 7 Things to Know

e-Mudhra IPO - 7 Things to Know
by 5paisa Research Team 20/11/2021

One of India’s largest digital signature authentication companies, e-Mudhra Ltd, has filed its draft red herring prospectus (DRHP) with SEBI for its proposed IPO. Typically, the SEBI approval process takes anywhere between 2-3 months, post which the actual IPO process starts.
 

Here are Seven interesting facts to know about e-Mudhra IPO


1. The IPO will comprise of a fresh issue of Rs.200 crore and an offer for sale of 85.1 lakh shares by promoters and early shareholders. The total size of the overall IPO issue will depend on the pricing arrived at.

2. Among the major participants in the offer for sale, the two largest participants are Venkataraman Srinivasan offering 32.9 lakh shares and Taarav Pte Ltd offering 31.9 lakh shares.

The balance shares will be offered by Kaushik Srinivasan, Lakshmi Kaushik and Anand Srinivasan and they will offer 15.2 lakh shares between them.

3. E-Mudhra is also exploring a pre-IPO placement of shares of up to Rs.39 crore and if that is successful, the size of the IPO would be reduced proportionately. The company will also explore an anchor placement closer to the issue opening date.

Check - e-Mudhra Files DRHP with SEBI for IPO

4. Out of the Rs.200 crore of fresh funds raised, the company will utilize Rs.35 crore to repay debt, Rs.41 crore for working capital purposes and Rs.47 crore for funding the data centre operations, including equipment.

The company will also deploy a sum of Rs.30 crore for product related cost and for investing in e-Mudhra Inc.

5. E-Mudhra currently has debt of Rs.51 crore on its books of which 70% will be repaid with the fresh issue proceeds. For FY21, e-Mudhra reported 13.73% higher sales revenue at Rs.132.45 crore, while net profit for the fiscal year was up 37.68% at Rs.25.36 crore.

Coverage related solvency ratios are likely to improve substantially post the IPO.

6. E-Mudhra is India's largest licensed certifying authority for digital signature certificates. It has a commanding market share of 38% as of FY21.

The share has been going up consistently. It has over 1.2 lakh retail customers and over 550 enterprise customers using its digital certification services. 

7. The IPO of e-Mudhra Ltd will be lead managed by IIFL Securities, Yes Securities and Ind-Orient Financial Services. The dates for the IPO would be finalized once the SEBI observations on the DRHP come in.

That will be followed with the filing of RHP with the Registrar of Companies and the actual IPO process.

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5paisa is now trusted by over 2 million customers, and counting

2 million customers
by Sheetal Agarwal 22/11/2021

In a short span of just 5 years, we, 5paisa Capital Limited (5paisa) have built a trusted, durable and sustainable bond with our customers. This fact is reflected in our pace of customer acquisition – average monthly rate of customer acquisition now stands at 1,25,000 versus 1,000 in 2016.

In fact, the quarter ending September 2021 marked our highest-ever quarterly customer acquisition at 3.4 lakh.

Today, we serve more than 2 million customers and want to extend our heartfelt gratitude to each one of them. Let us put this into perspective. Historically, traditional brokerages took at least a decade to achieve this milestone, while we have done it in a fraction of that time.

This feat provides testimony to two important facts. First, our motto of ‘making investing easy and rewarding’ resonates well with our customers. Second, we have successfully ‘walked the talk’ to imbibe this motto in everything that we do.

Needless to say, our management team has the foresight, vision and ability to not just develop but also implement winning strategies. In this write-up, we highlight some of the crucial decisions actioned by team 5paisa to achieve this important milestone. 
 

Pioneering ahead


Our ability to keep our ears close to the ground and gauge market trends swiftly; coupled with our strong execution capabilities have enabled us pioneer several concepts in the discount broking space in India.

With an aim to make the procedure for opening demat account simpler, easier and more transparent; we have been implementing several measures. That we were the first in the industry to launch these initiatives was an added bonus.

Back in 2016, the concept of Do-It-Yourself (DIY) virtually did not exist. Processes were largely in physical form and required manual interventions. At that time, we were the first brokerage to introduce complete digital opening of accounts.

Our processes were paperless, human less and did not require any physical signing or uploading of forms.

Back then, 5paisa became the first brokerage firm in India to start Aadhar-based demat account opening (one of the first broking companies to get UIDAI AUA license). We were also the first broker to introduce Electronic Delivery Instruction Slip or eDIS concept and scrap usage of Power of Attorney (PoA) for the purpose of opening a demat account.

This has now become an industry standard. From the 1st day of our operations, we opened 100% of demat accounts digitally. We were also among the first brokerages to provide robo-advisory services on mobile back then, when it was still a very nascent concept.
 

Extending investing beyond metros; guiding millennials


Our strategy of expanding the universe of investors helped us stand apart in a market where most of the incumbent large full service brokers were looking to churn existing investors. This strategy was the outcome of our in-depth market analysis which suggested that there is a vast universe of potential investors outside the big metros.

So, we enhanced our focus on acquiring customers in tier 2 and tier 3 towns of the country. Similarly, we identified millennials and DIY investors as other key target segments. Our ability to cater to them in the language of their choice acted as an important ice breaker, providing us an avenue to put a foot in the door.

We draw inspiration from the words of the father of marketing, Philip Kotler – “The best advertising is done by satisfied customers”. Our efforts are focused on hyper-personalization and localization to create superior customer experiences.

As a result, favorable word-of-mouth and organic initiatives bring 65-70% of new customers to our universe every year. This metric has grown from 35-40% levels in 2018. We have achieved 100% growth in customer acquisitions, every year, for the past 4 years.
 

Delivering superior customer experience, consistently


Customer-centricity is at the heart of all our activities. It is our constant endeavor to provide easy-to-use, simple and beneficial investing platforms and solutions to our customers. Our app is rated highly on all these parameters and was downloaded by 10 million+ users. The overall rating of our app stands at 4.3 stars.

In 2016, 14-15% of industry’s Average Daily Turnover (ADTO) was routed through mobile apps. Right from the start of our journey, we derived 75-80% ADTO from our mobile app. Currently, brokerage industry generates 35-40% of ADTO via mobile apps and we have maintained this metric between 75-80%.

Our app as well as our social media platforms (including our YouTube vides) are available in several Indian languages (8, including English), reaching a larger set of users. Every day users use 1 of the 7 regional languages.

Our app acts as a single-point investment destination for users. In addition to stocks, users can invest in mutual funds, buy insurance/gold, invest in US stocks and also avail loans through a single app.


Fast-tracking growth through technology


Cutting-edge technology forms the backbone of our business. Technology has the potential to drive growth at relatively lower costs, enhance efficiencies and create sustainable value for all our stakeholders. Over the past three years, technology has enabled us to do more with the same number of people.

We continue to build our technology capabilities with the primary objectives of serving existing customers better and acquiring more customers. All-round improvement in business processes is the secondary objective behind raising our tech-quotient.

While our journey so far has been exemplary, there are miles to go before we sleep. Keep watching this space to know more about our future journey.

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