InvestorQ : Is it true that PharmEasy has decided to put off its IPO plans?
Moii Chavate made post

Is it true that PharmEasy has decided to put off its IPO plans?

Tisha Malhotra answered.
1 month ago

Yes that is absolutely correct. API Holdings, the parent entity of PharmEasy, has officially announced the withdrawal of the draft red herring prospectus (DRHP), which it had submitted for an initial public offering (IPO). The draft prospectus of PharmEasy had been approved by SEBI but most of the digital plays got cold feet after seeing the value damage that the likes of Paytm, Policybazaar and Zomato had to undergo in the last few months. PharmEasy has concluded that the time may not be ripe, and perhaps too risky, for an IPO.

Now, for the fund raising exercise, API Holdings is considering to raise funds via a rights issue. The company has indicated that, most likely, the rights issue would be open for a period of 30 days starting the first week of September. While the size of the funding is yet open, PharmEasy plans to raise funds through the issue of compulsory convertible preference shares (CCPS). The issue price is slated to be around Rs100 per CCPS. The letters to existing shareholders is planned to be sent out shortly.

It may be recollected that in November last year, PharmEasy had filed to raise Rs6,250 crore via a fresh issue. The fresh funds were to be used to clear outstanding debt of Rs1,929 crore as well as to fund organic and inorganic growth of the company. Last month, Reuters had published a news report saying that PharmEasy was in talks with investors to raise close to $200 million. However, it is likely to be satisfied with valuations that could be at a discount of 15% to 25% lower than the $5.1 billion valuations sought last year. Pragmatism reigns.