PharmEasy said it will use 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.
ET reported in its October 30 edition that PharmEasy was days away from filing its DRHP to raise Rs 6,000-7,000 crore through a public issue which will be fully through fresh issuance of shares. As reported by ET in that edition, PharmEasy said in its DRHP it has acquired just under a 50% stake in enterprise resource planning firm Marg ERP for Rs 254 crore. While PharmEasy made the Thyrocare acquisition of over $600 million in June, it has also bought multiple firms like Aknamed and Medlife in the last one year.
For PharmEasy, marketing and promotions to increase awareness of its brand and services would be a key investment area. It spent close to Rs 95 crore in marketing in the first three months of the current financial year 2022, compared with almost Rs 138 crore in FY20 and over Rs 134 in FY21.
For the financial year 2021, API Holdings’ total income jumped more than threefold to Rs 2,360 crore from Rs 737 crore the previous year. Its losses widened 90% to Rs 641 crore. In the three months ended June 2021, it clocked income of Rs 1,207 crore with a loss of Rs 314 crore, the DRHP showed.
While PharmEasy has emerged as the largest medicine delivery firm, it has been diversifying with its acquisitions like Thyrocare to position itself as a digital healthcare firm.
Besides branding, PharmEasy said it will use new capital for its supply chain infrastructure and fulfilment, and technology capabilities and infrastructure. “Further, acquiring and integrating companies, teams and business models in the healthcare value chain is one of our key business focus areas, and we intend to continue to pursue strategic investments and acquisitions which are complementary to our businesses. We have made these investments in the past, and we expect these to continue to be critical for the growth of our business in the future. We have funded our growth through owned funds as well as borrowings and we intend to deleverage at a consolidated level by repayment or prepayment of some of our borrowings,” the company said in its draft IPO papers.
PharmEasy’s parent recently closed a nearly $350 million pre-IPO round, as reported by ET last month. Subsequently, it was valued at around $5.6 billion.
In total, in 2021 so far, it has raised nearly $1 billion including from secondary share sales.
PharmEasy entered the unicorn club at a valuation of $1.5 billion in April when Prosus Ventures, TPG and others led a $350-million funding round. Its valuation had jumped to a little over $4 billion after the Thyrocare deal.
Singapore-based Amansa Capital, Blackstone-backed hedge fund ApaH Capital, US hedge fund Janus Henderson, OrbiMed, Steadview Capital, Abu Dhabi’s sovereign wealth fund ADQ, hedge fund Neuberger Berman and London’s Sanne Group are among PharmEasy’s new investors who picked up stakes during the company’s recently concluded pre-IPO round.
With the filing of the DRHP, PharmEasy joins the likes of Paytm, Policybazaar and Delhivery who have also filed for an IPO. Zomato and Nykaa have already made their stellar debut on the bourses here. The company competes with Tata-owned 1mg and Reliance Industries’ Netmeds.
