API Holdings, the parent of e-pharmacy firm PharmEasy, on Monday said it has received the approval from the Securities and Exchange Board of India (SEBI) to raise Rs 6,250 crore through an initial public offering (IPO).
The SEBI approval comes amid rumors that PharmEasy may delay its IPO in the wake of market volatility that have been brutal to the shares of new age companies that got listed last year.
API Holdings had filed its draft red herring prospectus (DRHP) with SEBI in November last year on the back of a slew of IPOs and listings of new age companies such as Zomato, PolicyBazaar and Paytm.
PharmEasy's IPO will only be a primary share sale of shares of Rs 6,250 crore. The company will use Rs 1,929 crore from the IPO proceeds to repay or prepay borrowings and Rs 1,259 crore to fund organic growth initiatives. It will also allocate Rs 1,500 crore on inorganic growth opportunities through acquisitions and other strategic initiatives.
Last year, it created history with the acquisition of listed diagnostics firm Thyrocare Technologies.
The company may also consider a private placement aggregating up to Rs 1,250 crore. If such placement is completed, the fresh issue size will be reduced, it noted.
Prior to filing for an IPO, PharmEasy raised a $350 million pre-IPO round at a post-money valuation of $5.6 billion in October. The company raised over $955 million in 2021 alone.
API Holdings counts Naspers (12.04%) and Temasek Holdings (10.84%) as key financial investors who own double digit stakes in the company apart from more than a dozen more financial backers including TPG Growth, CDPQ, Bessemer, B Capital and others. The founders and the investors are not selling shares in the IPO.
Citigroup Global Markets India, JM Financial Ltd, Kotak Mahindra Capital, Morgan Stanley India and BoFA Securities India are joint bookrunners for the IPO.