Fearing volatility in stock markets, API Holdings, the parent company of healthtech unicorn PharmEasy, has withdrawn its draft red herring prospectus (DRHP) that it had filed with the Securities and Exchange Board of India (Sebi), the company informed its shareholders in a note. The pre-IPO draft papers, which were filed late last year, are being withdrawn due to “market conditions and strategic considerations”, the company said in a notice.
The capital markets regulator had, however, approved the company’s Rs 6,250-crore IPO. However, the company intends to raise funds to finance its expansion and growth plans.The communication added that the company would raise additional funds via a rights issue at an issue price of Rs 100 per share, applications for which will open “from on or around the first week of September”.
Also Read| Syrma SGS Tech IPO share allotment: Check status via BSE, Link Intime, grey market premium; listing on Aug 26
The type of instrument to be used for the fund raise will be compulsory convertible preference shares (CCPS), and the issue price is “expected to be around Rs 100 per CCPS”, it added.
In November last year, the company had filed its DRHP with the market regulator for a Rs 6,250-crore initial public offering (IPO).The notice announcing the withdrawal of IPO DRHP comes around a month after a Reuters report, citing sources, claimed that PharmEasy is in talks with investors to raise $200 million, but at a valuation that could be 15-25% lower than last year’s $5.1 billion.
In February, Sebi had floated a consultation paper, proposing more disclosures and transparency from NATCs with regards to their operating metrics. The regulator wants companies to justify the valuations they are asking for by providing details of key performance indicators (KPIs), among others. “As you may be aware, due to market conditions and strategic considerations, the company has withdrawn, its draft red herring prospectus which was filed with (the) securities (and) exchange board of India on November 9, 2021,” the company said in the note to its shareholders.The company had not responded to FE’s queries till press time on Saturday.