PharmEasy IPO - 7 Things to Know
API Holdings Ltd has filed the DRHP for its proposed IPO back in October and the approval from SEBI is still awaited, even as the issue has run into problems with the CAIT.
7 Important Things About API Holdings (PharmEasy) IPO
1) API Holdings Ltd has filed for a Rs.6,250 crore IPO with SEBI which comprises entirely of a fresh issue of Rs.6,200 crore and there will be no offer for sale component in the issue. API Holdings Ltd is the holding company for the popular digital brand PharmEasy, which offers an agnostic platform to list, sell and buy medicines online.
2) Out of the total issue of Rs.6,250 crore, Rs.1,929 crore will be allocated to repay outstanding debt of the company. An additional Rs.1,259 crore will be allocated for organic growth. Another Rs.1,500 crore will be allocated by API Holdings for inorganic mergers and acquisitions of niche digital and value-added players in the space.
3) API Holdings Ltd (PharmEasy) provides an agnostic platform to order medicines online and get them delivered at your doorstep. The business model has run into some problems with the CAIT which has delayed the issue. PharmEasy adopts necessary checks and balances before accepting an order including doctor’s prescriptions.
4) For FY21, API Holdings Ltd (PharmEasy) reported total revenues from sales of Rs.2,335 crore. During the same period, the company reported net loss widening sharply to Rs.645 crore for the year. Online pharma is a front-ended investment business where the gestation is normally quote long.
5) One of the important metrics for the online ecommerce plays is the gross merchandise value or the GMV. In the case of API Holdings Ltd (PharmEasy), the proforma GMV for FY21 stood at Rs.787 crore. However, in the first half of the current fiscal year ending Sep-21, the proforma GMV continued to be robust at Rs.303 crore.
6) Ahead of the actual IPO, API Holdings Ltd (PharmEasy) is also exploring the possibility of doing a pre-IPO placement of shares to the tune of Rs.1,250 crore. If that pre-IPO placement is successful, then the actual IPO size will be reduced proportionately to the extent of pre-IPO funds raised by the company.
7) The IPO of API Holdings Ltd (PharmEasy) will be lead managed by Kotak Mahindra Capital Company, Morgan Stanley India, BOFA Securities, Citigroup Global Markets and JM Financial. They will act as the book running lead managers or BRLMs to the issue.
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