InvestorQ : Can you tell me about the proposed PharmEasy IPO and when is it expected to hit the primary markets?
Moii Chavate made post

Can you tell me about the proposed PharmEasy IPO and when is it expected to hit the primary markets?

Tisha Malhotra answered.
10 months ago

PharmEasy is the online digital pharmacy brand owned and operated by API Holding Ltd. While the name of the parent company may not be well known, PharmEasy is one of the most popular retail online pharma brands in India. Now, PharmEasy has filed the draft red herring prospectus for its proposed Rs.6,250 crore IPO. Interestingly, the entire amount will be via the fresh issue route with no OFS component. Approval process takes 2 months.

PharmEasy has some marquee investors on its owner list including Prosus Ventures, TPG Growth, Temasek, CPDQ and LGT Lightrock. PharmEasy may look to raise around Rs.1,250 crore via pre-IPO private placement, in which case the final size of the IPO would be reduced proportionately. The issue will be lead managed by Kotak Mahindra Capital, Morgan Stanley, BOFA Securities, Citigroup and JM Financial.

The application of the fresh funds in the IPO will be as under. PharmEasy will utilize Rs.1,930 crore for reducing its current levels of debt. An amount of Rs.1,260 crore will be used to fund organic expansions and growth of the company. Finally, Rs.1,500 crore will be allocated to fund its inorganic expansions through very selective mergers and acquisitions. It will also set aside some funds for general corporate expenses out of the IPO issue.

Like most digital IPOs, PharmEasy has also been a top line story till date. In the last one year, the revenues grew 3.5 times to Rs.2,335 crore. Trends are that FY22 should be much better than FY21. PharmEasy reported a net loss of Rs.645 crore for the fiscal year FY21 and it is expected to widen in FY22 due to heavy front-ending of expenditure. Gross merchandise value or GMV, has grown 2.5 times at Rs.787 crore in FY21, which is the real data point.