Securities and Exchange Board of India (SEBI) has issued final approval to initial public offering worth ₹6,250 crore by PharmEasy’s parent company API Holdings. The market regulator in a statement on Monday said that it has issued observations on IPO requests by three companies, including API Holdings. Issuing observations in SEBI’s parlance refers to final approval for an initial public issue.
The other two companies who received the regulator’s nod to float their IPOs include CMR Green Technologies Limited and Wellness Forever Medicare Limited.
The API Holdings IPO will entirely be a fresh issue with only a primary share sale of an unspecified number of shares worth ₹6,250 crore. Prior to the issue, the company currently holds 6,098,109,930 equity shares.
The company will use ₹1,929 crore from the IPO proceeds to repay or prepay borrowings, and ₹1,259 crore to fund organic growth initiatives, besides allocating ₹1,500 crore on inorganic growth opportunities through acquisitions and other strategic initiatives. The rest of the proceeds will be used for general corporate purposes.
Additionally, the company, in consultation with the bankers to the issue may consider a private placement aggregating up to ₹1,250 crore. If such placement is completed, the fresh issue size will be reduced.
According to a RedSeer Report, as API Holdings mentioned in its DRHP, the company 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. The company provides digital tools and information on illness and wellness, teleconsultation facility, diagnostics and radiology tests, and delivers treatment protocols including products and devices, according to the company’s draft red herring prospectus submitted to SEBI.
The company was founded by five childhood friends — Siddharth Shah, Hardik Dedhia, Harsh Parekh, Dharmil Sheth and Dhaval Shah — commonly referred to as the Ghatkopar Gang, coming from the suburb of Ghatkopar in Mumbai. They started their journey from DialHealth in 2012, a digital and phone order platform that allowed access to teleconsult, diagnostic lab pickups and medical product delivery. It eventually evolved into API Holdings that now runs digital healthcare platforms like PharmEasy.
API Holdings had most recently acquired 66.1% stake in Thyrocare Technologies from its founder A Velumani for ₹4,546 crore (at ₹1,300 per share) through Docon Technologies, which is a 100% subsidiary of API. Thyrocare operates diagnostic and preventive care laboratories in India, Nepal, Bangladesh and the Middle East. In September 2021, they acquired a majority stake in Bengaluru-based tech focussed, healthcare supply chain start-up Akna Medical Pvt Ltd (Aknamed), which is backed by Lightrock, for an undisclosed sum.
As of 30 June 2021, API Holdings provided access to more than 50,000 stock keeping units (SKUs) across 18,587 pin codes in 2,601 cities and towns across the country. Its revenues and business are spread across the length and breadth of India, urban and rural and provides its services to 3,261 wholesalers, 87,194 pharmacies, and 4,617 prescribing doctors and clinics and 926 hospitals, with 25 million registered users.
Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, BofA Securities India Limited, Citigroup Global Markets India Private Limited, JM Financial Limited are the book running lead managers to the issue.
