E-pharma start-up, PharmEasy is looking to raise Rs 6,250 crore ($840 million) in the upcoming Initial Public Offering (IPO), company’s filings with the Securities Exchange Board of India (SEBI) stated. The start-up is also looking to raise Rs 1,250 crore ( nearly $150 million) as a part of the pre-IPO placement round, as per the Draft Red Herring Prospectus (DRHP) filed, which was accessed by the BusinessToday.In.
The company has also indicated that in case it successfully completes its pre-IPO round, the issue size may decrease subsequently. It intends to use the net proceeds from the share sale for funding, payment/ repayment of borrowings availed by the PharmEasy and its group companies, aggregating up to Rs 1,929 crore whereas, another Rs 1,500 has been earmarked for acquisitions and expansions.
“We intend to continue to invest in three core areas for the growth of our business which include a) marketing and promotional activities to increase awareness about our offerings and brands, b) supply chain infrastructure and fulfilment, and c) technology capabilities and infrastructure. Further, acquiring and integrating companies, teams and business models in the healthcare value chain is one of our key business focus areas, and we intend to continue to pursue strategic investments and acquisitions which are complementary to our businesses. We have made these investments in the past, and we expect these to continue to be critical for the growth of our business in the future,” the company’s DRHP read.
COVID-19 INDUCED BOOST
PharmEasy said that it has been able to consistently scale its business with revenue from operations growing by 249.8 per cent to Rs 2,352 crore in FY21 from Rs 667 crore in FY20 .
“We have also been able to demonstrate improving cost efficiencies and operating leverage in our business. The Pro-Forma Contribution Margin before sales and marketing promotion expenses as a percentage of Pro-Forma Revenue from Operations was 5.0 per cent for fiscal 2021 and 5 percent for the three-month period ended June 30, 2021. Our EBITDA losses have also improved from 57.9 percent, in fiscal 2020 to 24.4 per cent in fiscal 2021,” the firm said.
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