By Salman SH

API Holdings, the parent company of online pharmacy start-up PharmEasy, on Monday received the definitive approval from Sebi to raise Rs 6,250 crore through an initial public offering (IPO).

API Holdings, which owns an umbrella of brands including PharmEasy, Thyrocare, Docon, Retailio, and Aknamed, had filed draft papers to raise Rs 6,250 crore in fresh equity shares through its proposed IPO in November 2021.

The online pharmacy start-up was last valued at $5.6 billion (Rs 42,197.79 crore) in a Rs 2,635.22-crore pre-IPO round in October.

The Mumbai-headquartered company is an integrated, end-to-end business that provides solutions for healthcare needs of consumers including digital tools and information on illness and wellness, offering teleconsultation, offering diagnostics and radiology tests, and delivering treatment protocols including products and devices.

The start-up also plans to issue a pre-IPO placement offer which will be undertaken through consultation with the book running lead managers for an aggregate amount not exceeding Rs 1,250 crore. 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 size.

“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 start-up said in its DRHP in November 2021.

API Holdings plans to use around Rs 1,929 crore from the IPO proceeds to repay or prepay borrowings and Rs 1,259 crore to fund organic growth initiatives, besides allocating Rs 1,500 crore on inorganic growth opportunities through acquisitions and other strategic initiatives.

Morgan Stanley India, BoFA Securities India, Kotak Mahindra Capital, JM Financial and Citigroup Global Markets India have been appointed lead bankers for the IPO.

The pharmacy start-up reported revenues of Rs 2,335.26 crore during the financial year ended March 31, 2021, a 3X increase compared with Rs 667.54 crore reported in FY20. Its losses stood at Rs 641.33 crore in FY21, against Rs 335.27-crore loss in FY20.

PharmEasy said it does not have an identifiable promoter. Some of its largest investors include South African Internet holding firm Naspers and Singaporean investment firm Temasek which hold 12.04% and 10.8% shares, respectively.

Founded in 2015 by Dharmil Sheth and Dhaval Shah, PharmEasy currently claims to connect more than 60,000 brick-and-mortar pharmacies and 4,000 doctors across 16,000 zip codes across the country. The start-up also claims to have served more than 20 million customers.

To date, PharmEasy has raised over $1.2 billion in equity and debt funding and its last significant deal was the $600-million acquisition of diagnostics chain Thyrocare in June this year.

PharmEasy was also the first unicorn in the online pharmacy start-up space, achieving the status in April 2021.