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PharmEasy parent to file DRHP soon for Rs 6,000-7,000 crore IPO

Bengaluru: API Holdings, the parent entity of India’s largest e-pharmacy PharmEasy, is set to file a draft red herring prospectus in the next 7-10 days for a Rs 6,000-7,000 crore initial public offering, people aware of the matter said.

The PharmEasy IPO is expected to be a fully primary share sale.

With this, PharmEasy will join a slew of top-tier startups that are set to go public this year, buoyed by the
record Rs 9,000-crore listing by Zomato in July. While
Paytm, Nykaa and Policybazaar are launching their IPOs around Diwali, PharmEasy is likely to be a publicly traded firm before the end of the current financial year. Logistics tech startup Delhivery
is also in the final stages of filing its draft IPO papers next week.

“PharmEasy is looking to raise anywhere between Rs 6,000 crore and Rs 6,500 crore from the IPO. The DRHP would be a minimum of Rs 6,000 crore — and they could potentially increase it by another 20% ( as per Sebi rules),” a person aware of the plans said. “It is a fully primary share sale.”

The company, which was
one of the nominees for the Startup of the Year award in this year’s The Economic Times Startup Awards, was aiming to file the draft IPO papers by October, but it took time to close its pre-IPO round. “That’s why it has spilled into early November now,” a source said.

2021 has proven to be a record year for startups with
unprecedented capital inflow to the sector.
Paytm’s Rs-18,300 crore IPO is set to be the biggest ever in Indian corporate history. According to an IVCA-Preqin report, venture capital investment in Indian startups was at a record high of $26 billion as of October 7.


Pre-IPO Round

The Mumbai-based e-pharmacy recently
closed a nearly $350-million pre-IPO round, as reported by ET, earlier this month. Subsequently, it was valued at around $5.6 billion.

“It (PharmEasy) will list at a higher valuation than the pre-IPO round, of course, but that’s not finalised yet. It wants to price it in a way so there is room for more growth (in valuation) after the listing,” said one person in the know.

A PharmEasy spokesperson declined to comment.

“The paperwork is done. No one (investors) really wanted to sell in the IPO. There is enough bullishness to price the IPO at more than $8 billion but it (PharmEasy) will take a call on that close to the listing after the DRHP is filed,” said another person aware of the company’s thinking.

Acquisition Spree

The company is also in talks to pick up almost 49% stake in enterprise resource planning firm Marg ERP, according to sources in the know.

Marg, founded in 1992, offers business software products with specialisation in the pharmaceutical and FMCG trade with solutions around customised inventory, accounting and digital payments for small and medium businesses. “It would nearly be a Rs 400 crore deal and the discussions are in advanced stages,” said a person cited above.

An email sent to Marg ERP remained unanswered.

In September, ET had reported that PharmEasy
had closed a $180-190 million acquisition of cloud-based hospital supply chain management startup Aknamed. Prior to this, the company
made its largest acquisition yet, that of diagnostics chain Thyrocare Technologies Ltd. for over $600 million in June. These acquisitions are part of its move to broaden its positioning as a digital healthcare platform rather than just being an e-pharmacy player.

The company has raised a total of $1 billion, including secondary funding, in 2021.

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 around $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 participated in recently closed pre-IPO round.

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