PharmEasy, India’s largest e-pharmacy business, is preparing to file draught papers by October in preparation for an Initial Public Offering (IPO) later this fiscal year, according to sources.
This comes as talks with Japan’s SoftBank for a fresh fundraising round have fallen. PharmEasy is on schedule for an IPO but is still in talks with early investors to fundraise between $200 million and $300 million at a valuation of $5.6 billion.
PharmEasy’s parent company, API Holdings, was estimated at $4.2 billion in June.
It remained unclear who the possible new investors were or whether such a deal would conclude before the company filed the Draft Red Herring Prospectus (DRHP) with India’s capital markets regulator, the Securities and Exchange Board of India (Sebi). API Holdings is collaborating on the DRHP with JM Financial and Kotak Investment Banking after the two banks assisted in the acquisition of diagnostics chain Thyrocare in June.
The business has raised approximately $650 million in the previous several months from investors such as Prosus (formerly Naspers), BCapital, TPG, and others.
According to a source familiar with the situation, “PharmEasy wants to create a new value benchmark before the IPO.”
“They intend to file IPO papers by October and then list within the next several months. It may extend into next year, but the goal is to list by the end of this fiscal year “a third individual was added
Since PharmEasy’s investors are aiming at a valuation of well over $5 billion, the dialogue between SoftBank and PharmEasy has been stalled for a few months.
“That hasn’t happened, and both groups are unlikely to return to the negotiating table. SoftBank isn’t going forward with it “according to one of the sources.
PharmEasy is the only big independent company left after Reliance Industries bought more than 60% of e-pharmacy startup Netmeds last year and the Tata Group purchased 1mg in June. It purchased smaller rival Medlife last year, though the deal didn’t finalize until this year.
The accomplishment of food delivery app Zomato’s IPO in July, which set the scene for Indian internet businesses to go public this year, coincides with PharmEasy’s IPO ambitions.
Paytm, PolicyBazaar, and Nykaa are among the more than half-dozen firms that have filed for IPOs in the domestic market.
PharmEasy will aim to fund somewhere between $800 million and $1 billion due to improved liquidity, according to sources familiar with the company’s thinking.
The firm is in the final stages of concluding its open offer in Thyrocare.
“Over the last year, the firm has doubled its number of doctors and pharmacists. As a result, they expect a significant increase in their worth “this individual said, “Once the Thyrocare open offer expires, it will be clearer.”
PharmEasy is also exploring a reverse merger with Thyrocare, given that the diagnostics chain is already a publicly-traded company.
“Because Thyrocare is a public company, there will be a lot of disclosures. So that’s one of the possibilities under consideration at the moment “According to one of the sources.
According to research, the online pharmacy industry in India would grow to $2.7 billion by 2023, up from $360 million in 2020.
With its priority delivery service, which delivers medications in three to four hours for a charge, the Mumbai-based firm has also begun quicker pharmaceutical deliveries throughout key markets.
PharmEasy has not used the phrase “express delivery,” as it is widely used in the online consumer internet sector.
In June, Tata-owned 1mg was aiming to introduce one-hour delivery and was delivering numerous orders in 4 – 5 hours, beginning in Delhi and Gurugram.
Typically, e-pharmacies fulfil the majority of online purchases in 24-48 hours since they originate from patients with chronic conditions who prepare ahead of time.
A slew of leading e-commerce firms, particularly those that sell groceries, are guaranteeing 10-minute to 30-minute delivery times.
PharmEasy is expanding its role in online medical consultations in addition to drug delivery and test appointments. According to recent research from Praxis Global Alliance, the Covid-19 epidemic boosted teleconsultation’s rise in India, which had a market size of $163 million in March. By March 2024, this is expected to reach $800 million.