API Holdings files for Rs 6,250 cr IPO

API Holdings, India’s Largest Digital Healthcare Company, has filed preliminary papers with capital markets regulator Sebi to raise Rs 6250 crore through an initial share sale.

The issue will be only be a primary share sale of shares and the entire proceeds will go to the company. There will not be any offer for sale by existing investors in the IPO, showing a great deal of commitment and belief by existing shareholders, draft red herring prospectus (DRHP) filed with Sebi showed on Monday, November 8. Amongst a slew of tech IPO’s in India such as Zomato, Nykaa, PayTM, Policy Bazaar and Delhivery, this IPO stands out as the only one with no secondary sale of shares by any existing shareholder.

Additionally, the company, in consultation with the bankers to the issue may consider a private placement aggregating up to Rs 1250 crore. If such placement is completed, the fresh issue size will be reduced.

API Holdings’s pre-IPO round that closed in October 2021, was oversubscribed significantly, with participation from Singapore-based Amansa Capital, US based hedge fund Janus Henderson, Global Healthcare Focussed Asset Manager OrbiMed, Tech Focussed Steadview Capital, Abu Dhabi’s sovereign wealth fund ADQ, Large Global Asset Manager Neuberger Berman to name a few, and was reportedly priced at US $5.4Bn. It was reported that the Founders & Employees of API Holdings participated significantly in this round, showing great belief and commitment in the Company’s prospect.

The five founders of API Holdings, Siddharth, Hardik, Harsh, Dharmil and Dhaval are childhood friends, commonly referred to as the Ghatkopar Gang, coming from the suburb of Ghatkopar in Mumbai. The journey of the API Holdings founders that started from DialHealth in 2012, a digital and phone order platform that allowed access to teleconsult, diagnostic lab pickups and medical product delivery has come a long way to now become India’s largest digital healthcare platform.

According to a RedSeer Report, stated in its DRHP, API Holdings Ltd is India’s largest digital healthcare platform based on gross merchant value (GMV) of products and services sold for the year ended March 31, 2021. It is an integrated, end-to-end business that aims to provide solutions for healthcare needs of consumers providing digital tools and information on illness and wellness, offering teleconsultation, offering diagnostics and radiology tests, and delivering treatment protocols including products and devices.

API Holdings had most recently acquired 66.1 percent in Thyrocare Technologies from its founder A Velumani for Rs 4,546 crore (at Rs 1,300 per share) through Docon Technologies which is a 100 per cent subsidiary of API and in September 2021, they acquired a majority of Bengaluru based tech focussed, healthcare supply chain startup Akna Medical Pvt Ltd (Aknamed) that is backed by Lightrock for an undisclosed sum.

As of 30 June 2021, API Holdings provided access to more than 50,000 stock keeping units (SKUs) across 18,587 pin codes in 2,601 cities and towns across the country. Its revenues and busines are spread across the length and breadth of India, urban and rural and provides its services to 3,261 wholesalers, 87,194 pharmacies, and 4,617 prescribing doctors and clinics and 926 hospitals, with 25 million registered users.

Indian pharma industry is expected to grow at a CAGR of 9% from a ~Rs 2.1 trillion (~US$28 billion) to ~ Rs 3.2 trillion (~US$43 billion) by 2025 (growing at ~9% CAGR), led by growth in the chronic segment, non-metro markets and organized channel and due to increased urbanization, higher awareness of medication and help of government-led initiatives and digitization, favourable government policies such as Ayushman Bharat (to improve quality & access to care) and emphasis on Digital India with a specific focus on the National Digital Health Mission.

Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, BofA Securities India Limited, Citigroup Global Markets India Private Limited, JM Financial Limited are the book running lead managers to the issue.

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