API Holdings Ltd., owner of India’s largest online pharmacy PharmEasy, has filed for a Rs 6,250-crore initial public offering, aiming to become the nation’s first such platform to list on the bourses as the stock market rallies.
A $100-Billion Opportunity
Based on API Holdings’ current suite of product and service offerings, the target market is expected to be $100 billion (Rs 7.5 lakh crore) by 2025, the DRHP said citing RedSeer Research. That includes pharma, diagnostics, OTC, consultation and hospital supplies segments of the Indian healthcare market.
The online health market, comprising home delivery of medicines and OTC products, online diagnostics tests and home sample collection, doubled to Rs 6,700 crore in 2019, the RedSeer data showed. The growth slowed to Rs 8,900 crore in 2020 because of the restrictions imposed to curb Covid-19.
India’s digital penetration in health is at a very nascent stage, and is considerably lower than China’s (10-15%) and the U.S.’ (30-35%).
Online pharmacy penetration in India is at 2.3%.
Doctor consultation via online platforms at 0.8%.
Financials
API Holdings’ consolidated revenue jumped more than threefold to Rs 2,335 crore in the financial year ended March 2021. Losses, however, have also widened to Rs 636 crore during the period.
But multiple acquisitions have strengthened the company’s balance sheet over the last one year. Its pro forma consolidated revenue touched Rs 4,363 crore for 2020-21, nearly twice the group’s consolidated revenues. Pro forma losses widened to Rs 1,549 crore in the year.
Risks
Healthcare industry in India is subject to extensive government regulation and supervision as well as monitoring by various government authorities. Certain other laws, rules and regulations may affect the pricing, demand and distribution of pharmaceutical products such as relating to procurement, prescription and dispensing of drugs by hospitals and other medical institutions, and retail pharmacy.
It faces intense competition across business lines, and competes against other online platforms, diagnostics companies, traditional wholesalers as well as other online and offline healthcare service providers.
Changing regulations in India could lead to new compliance requirements that are uncertain.
RECOMMENDED FOR YOU
POPULAR