SEBI Approves API Holdings IPO

API Holdings, the parent firm of PharmEasy, has got clearance from markets regulator Securities and Exchange Board of India for the online pharmacy’s initial public offering.  Sebi’s nod for PharmEasy’s parent’s IPO comes at a time when new-age companies are seeing a steady drop in their share prices after having gone public last year. On Monday, shares of Paytm, Nykaa, Policybazaar, and Car Trade touched new lows during trading hours. The share price of One97 Communications, the parent of Paytm, has now fallen more than 60% from its high, while Nykaa is down 42% from its high. it is still not clear if its IPO will happen by March or will it spill over to the next financial year.

The company was last valued at $5.6 billion and was aiming at an IPO valuation of around $7-8 billion. It closed a $350-million pre-IPO funding round in October, taking its total fundraising in 2021 to nearly $1 billion. The company plans to issue a pre-IPO placement offer which will be undertaken through consultation with the book running lead managers for an aggregate amount not exceeding Rs 1,250 crore. If the pre-IPO placement is undertaken, the issue size will be reduced by the amount raised from the pre-IPO placement and the minimum issue size. It plans to use around Rs 1,929 crore from the IPO proceeds to repay or prepay borrowings and Rs 1,259 crore to fund organic growth initiatives, besides allocating Rs 1,500 crore on inorganic growth opportunities through acquisitions and other strategic initiatives. The pharmacy start-up reported revenues of Rs 2,335.26 crore during the financial year ended March 31, 2021, a 3X increase compared with Rs 667.54 crore reported in FY20. Its losses stood at Rs 641.33 crore in FY21, against Rs 335.27-crore loss in FY20.