API Holdings Ltd, the parent company of the popular digital pharmacy brand PharmEasy, has been making headlines recently with its proposed Initial Public Offering (IPO). With a filing made to the Securities and Exchange Board of India (SEBI) back in October, the company’s IPO has garnered significant attention. However, despite the anticipation surrounding this move, approval from SEBI is still awaited. Additionally, the IPO has encountered some hurdles, notably from the Confederation of All India Traders (CAIT). It is also recommended to keep an eye on PharmEasy share price.
Here are seven important things to know about API Holdings Ltd and its upcoming IPO:
IPO Details
API Holdings Ltd has filed for a substantial IPO worth Rs.6,250 crore with SEBI. This offering comprises entirely of a fresh issue of Rs.6,200 crore, with no offer for sale component. As the holding company for PharmEasy, API Holdings operates a digital platform facilitating the listing, sale, and purchase of medicines online.
Utilisation of Funds
Out of the total IPO proceeds, Rs.1,929 crore will be allocated to repay outstanding debt, while Rs.1,259 crore is earmarked for organic growth initiatives. Additionally, Rs.1,500 crore will be set aside for inorganic mergers and acquisitions within the digital healthcare space.
Business Model and Challenges
PharmEasy’s platform allows users to order medicines online and have them delivered to their doorstep. However, the company has faced challenges, particularly from the CAIT, which has caused delays in the IPO process. PharmEasy ensures compliance with necessary regulations, including the validation of doctor’s prescriptions. It is thus a good time to invest in PharmEasy shares.
Financial Performance
In the fiscal year 2020-21, API Holdings reported total sales revenues of Rs.2,335 crore. Despite this, the company experienced a significant net loss, amounting to Rs.645 crore for the year. Such losses are common in the online pharmacy sector due to front-ended investment requirements.
Gross Merchandise Value (GMV)
GMV is a crucial metric for e-commerce platforms. For API Holdings, the proforma GMV for FY21 was Rs.787 crore. Notably, in the first half of the current fiscal year, the proforma GMV remained robust at Rs.303 crore.
Pre-IPO Placement
In addition to the IPO, API Holdings is exploring a pre-IPO placement of shares, aiming to raise Rs.1,250 crore. If successful, this pre-IPO placement would reduce the size of the IPO proportionately. It is always better to check PharmEasy share price today to make a well-informed decision.
Lead Management
Kotak Mahindra Capital Company will lead manage the IPO of API Holdings Ltd, underlining the confidence of reputable financial institutions in the company’s potential.
Despite the challenges and delays, API Holdings Ltd’s IPO promises to be a significant event in the Indian healthcare and digital commerce sectors, offering investors an opportunity to participate in the growing online pharmacy market.Stockify is a pioneering platform to buy unlisted shares, leveraging digital innovation to redefine the way individuals engage with financial markets. Offering a user-friendly interface and a wide array of investment tools and resources, Stockify empowers users to make informed decisions and manage their portfolios with ease. With its emphasis on accessibility and cutting-edge technology, Stockify is poised to revolutionise the investment landscape, making wealth management more efficient and inclusive for all.