PharmEasy, India’s largest online pharmacy, plans to raise $1 billion in an initial public offering (IPO) later this year at a $9 billion valuation.
According to sources, the funds will be generated by issuing new shares rather than existing ones, meaning that no current owners, founders, or investors will sell their stakes.
API Holdings Private Ltd. owns PharmEasy, which is currently working with its advisers on the IPO possibilities and will announce it soon.
Investors in the online drugstore firm include Prosus Ventures, CDPQ, Temasek, and TPG Growth. It expects to file its draft prospectus for an IPO by the end of October this year.
Investors in PharmEasy chose not to sell their shares after the IPO, demonstrating their belief in the company’s and the online pharmacy market’s growth potential.
Because of the potential for future expansion, the online pharmacy sector has already attracted India’s big conglomerates, such as the Tata group and Reliance Industries Ltd.
According to a source familiar with the development, “The company plans to make more acquisitions in the near future and has been on the lookout for suitable targets that match its long term objectives.”
In June, the online pharmacy PharmEasy bought a majority share in the diagnostic chain Thyrocare.
PharmEasy, an online pharmacy startup, has acquired the majority of the Thyrocare diagnostic chain technology in an effort to expand and improve its diagnostics business.
PharmEasy parent API Holdings struck a formal arrangement to buy a 66.1% share in Thyrocare for Rs 4,546 crore on Friday, according to an exchange filing. This is the first acquisition of a publicly-traded company by an Indian unicorn.
In April, Prosus Ventures (formerly Naspers) and TPG Growth invested $350 million for a $1.5 billion value. Pharmeasy was the first e-pharmacy startup in the country to be recognised as a unicorn.
In the second week of April this year, a total of six companies, including Meesho, Gupshup, Cred, and Groww, joined the exclusive club.
PharmEasy, which was founded in 2015 by Dharmil Sheth and Dhaval Shah, also bought a smaller competitor, Medlife, in May, making it India’s largest online pharmacy and healthcare aggregator.
It now ships drugs to over 1,000 cities across the country and offers diagnostic testing in all of the country’s main cities and towns.
While PharmEasy raised $350 million in April to become a unicorn with a $1.55 billion valuation, Thyrocare has a market capitalization of INR 7,660 crore. Their shares were trading at INR 1,450.35 at the end of the day.
The company’s stock price increased by 187% in the previous year, at a time when the country was on the verge of a Covid-19 pandemic.
Following the pandemic, there has been a significant surge in the demand for online medication delivery in India.
To name a few factors, the sector has grown as a result of the simple access to medicine, the lack of physical interaction, and the availability of replacement pharmaceuticals.
Aside from these causes, the development of telemedicine has aided the growth of online pharmacies. The telemedicine market is predicted to reach $5.4 billion by 2025, with a compound annual growth rate of 31%, according to forecasts.
