API Holdings IPO Company Profile:
API Holdings Limited is India’s largest digital healthcare platform based on GMV of products and services sold for the year ended March 31, 2021. The company operates an integrated, end-to-end business that aims to provide solutions for the healthcare needs of consumers by providing digital tools and information on illness and wellness, offering diagnostics, offering teleconsultation, and radiology tests, and delivering treatment protocols including products and devices. The company’s growing nationwide presence, the connected ecosystem approach, and multiple synergistic offerings have enabled it to build relationships with various stakeholders of the healthcare value chain.
API Holdings Limited’s businesses have a presence across the country, with last-mile capabilities to deliver in over 18,587 pin codes (for June 2021) via the PharmEasy marketplace, allowing it the ability to provide access affordably to the common man. The company’s platforms have scaled across urban, semi-urban, and rural India, with an ability to serve people across income groups and geographies.
API Holdings IPO Details :
|IPO Open Date||Not Available|
|IPO Close Date||Not Available|
|Listing Date||Not Available|
|Face Value||₹1 per share|
|Lot Size||Not Available|
|Issue Size||[●] shares
(aggregating up to ₹6250 Cr)
|Fresh Issue||[●] shares
(aggregating up to ₹6250 Cr)
|Pre-IPO Placement||[●] shares
(aggregating up to ₹1250 Cr)
|Issue Type||Book Built Issue IPO|
|Listing At||BSE, NSE|
|QIB Shares Offered||Not more than 50% of the Offer|
|NII (HNI) Shares Offered||Not less than 15% of the Offer|
|Retail Shares Offered||Not less than 35% of the Offer|
API Holdings IPO Products and Services:
- Sale of Products: API Holdings Limited’s Pro Forma GMV for the sale of products was Rs. 4,305.76 crores and Rs. 1,544.82 crores in Fiscal 2021 and three months ended June 30, 2021, respectively. This includes GMV from:
- Distribution to retailer: API Holdings Limited sells pharma, OTC, and private label medical products, surgical, and consumables procured from pharmaceutical companies and wholesalers to retailers. These retailers are typically registered sellers on the PharmEasy The company has also launched a range of private label products across categories through its brands ‘Liveasy’ and ‘Everherb” to target the large and fast growing-consumer healthcare segment including OTC, multivitamins, wellness, orthopaedic, and diabetic care products amongst others.
- Distribution to chemist and institutions: API Holdings Limited operates a technology-powered distribution business under which it procures pharma, OTC, and private label medical products, surgical and consumables from pharmaceutical companies and wholesalers, and sell to chemists and institutions, which largely include pharmacies, hospitals, doctors, clinics, and medical centers in India. The company sells these products both directly as well as using technology provided by Retailio. This business was operated by erstwhile Ascent and the company now refers to this business as Retailio 1P.
- API Holdings Limited has strengthened its distribution business to hospitals, clinics, and medical centers in India through the acquisition of 67% shareholding of Aknamed effective September 2021. Aknamed is one of the largest tech-enabled suppliers to hospitals in India, in terms of revenue in Fiscal 2021. With 19,294 unique SKUs offered and a pan-India presence, 926 hospitals were serviced by Aknamed during the three months that ended June 30, 2021.
- Sale of Services: API Holdings Limited’s Pro Forma GMV from the sale of services was Rs. 3,245.16 crores and Rs. 1,481.44 crores in Fiscal 2021 and three months ended June 30, 2021. This includes GMV primarily from:
- Diagnostic services: API Holdings Limited strengthened this business through the acquisition of Thyrocare in September 2021. Thyrocare is the largest diagnostics test provider by volume, with one of the lowest costs of testing, as of the financial year 2021. Thyrocare offers a comprehensive portfolio of 283 diagnostics tests through 17 owned diagnostics labs, approximately 4500 diagnostics collection centers as of 31 March 2021, and an in-house team of 16 pathologists and 889 phlebotomists as of June 30, 2021. The company offers this service to consumers, hospitals, diagnostic companies, and independent phlebotomists. Consumers can avail of the diagnostics services by walking into a collection center, calling the company’s helplines for home collection, and booking a test online through PharmEasy marketplace, Thyrocare’s website and mobile application, and other third-party online channels.
- Direct-to-pharmacy services: API Holdings Limited owns and operates Retailio, one of India’s largest online pharma platforms, in terms of the retailer base as of the financial year 2021, providing technology that enables wholesalers and pharmacies to connect and sell a wide range of pharma and other medical products. Retailio is digitizing the traditional pharma supply chain via digital ordering, logistics, payments, and credit and empowering pharmacies with technology products. It is available as a web application and mobile app. Retailio provides pharmacies with real-time inventory visibility, price discovery, and provides technology enabling ordering, confirmation, and payments in a digitized, self-serve manner.
- Services for doctors and teleconsultation for consumers: API Holdings Limited provides EMR and practice management software and teleconsultation tools to doctors through its proprietary, AI-driven predictive software called Docon. The company also provides teleconsultation services to customers on Docon mobile application and on PharmEasy marketplace. 10.7 million Digital prescriptions were generated during the Fiscal 2021 on the platform. Additionally, the company facilitated 3.4 million teleconsultations in Fiscal 2021. Docon is customizable with simple configuration parameters, and identifies patterns of consultation, diagnosis, and prescription as doctors interact and spend more time using the software
- ERP (“Enterprise resource planning”) services for pharmacies: RedBook is an ERP and customer relationship management software for pharmacies. 2,537 pharmacies/retailers are active on RedBook for the month of June, 2021. It allows pharmacies in the company’s network to avail technology tools and data intelligence to deliver better customer service and drive efficiencies in their operations. In October 2021, to expand its network and add more technology capability the company acquired a 17% stake in Marg, an ERP software vendor to pharmacies and wholesalers. This business provides ERP solutions to more than 200,000 pharmacies and wholesalers as of June 30, 2021.
- Fulfilment and technology services for PharmEasy: API Holdings Limited provides last-mile fulfillment services to Axelia for pharmaceutical and OTC products sold on the PharmEasy marketplace. In Fiscal 2021, 9% of fulfilled orders on the PharmEasy marketplace were delivered by us. The company also license the “PharmEasy” brand name and provide franchisor services, such as fulfillment, marketing, and digital enablement for franchisee-owned and operated offline pharmacies. The company’s Pro Forma GMV includes the GMV contribution from its acquisitions of Ascent, Medlife, Aknamed, and Thyrocare as if these were acquired on April 1, 2020.
API Holdings IPO Financial Analysis:
|Particulars||3M of FY-22(in cr.)||FY-21(in cr.)||FY-20(in cr.)||YoY|
|Revenue from Operations||1196.81||2335.27||667.54||249.83%|
|Profit / (loss) before tax||-319.76||-620.27||-346.96||LOSS|
|Profit / (loss) After tax||-313.89||-641.34||-335.28||LOSS|
API Holdings IPO Major Shareholders
|S. No.||Name of the shareholder||Pre-Issue|
|Number of Equity Shares on a fully diluted basis||Percentage of the Equity Share capital on a fully diluted basis* (%)|
|1||Naspers Ventures BV||81,33,16,570||12.04%|
|2||Macritchie Investments Pte. Ltd||73,25,16,290||10.84%|
|3||Surbhi Singh jointly with Universal Trustees Private Limited||45,27,80,680||6.70%|
|4||TPG Growth V SF Markets Pte. Ltd.||44,94,92,340||6.65%|
|5||Evermed Holdings Pte Ltd||39,60,33,000||5.86%|
|7||CDPQ Private Equity Asia Pte. Ltd.||28,00,92,780||4.14%|
|8||Lightstone Fund S A||26,12,29,320||3.87%|
|10||Bessemer India Capital Holdings II Ltd||21,03,63,670||3.11%|
|11||The Fundamentum Partnership Fund I||12,16,93,330||1.80%|
|12||Eight Roads Ventures India III LP||12,09,85,260||1.79%|
|13||Shivanand Shankar Mankekar HUF||9,15,96,340||1.36%|
|15||Orios Venture Partners Fund – I||8,48,97,120||1.26%|
|16||SARV Investments Limited||8,27,79,620||1.22%|
|17||Jasmine Bhaskar Shah jointly with Bhaskar Prataprai Shah jointly with Siddharth Shah||8,25,00,000||1.22%|
|18||J M Financial and Investment Consultancy Services Pvt Ltd||7,67,17,740||1.14%|
|19||B Capital Asia II, Ltd||7,31,52,420||1.08%|
|20||Amansa Investments Ltd||6,89,82,980||1.02%|
|21||Internet Fund VI Pte. Ltd||6,47,52,930||0.96%|
|22||Kedar Shivanand Mankekar jointly with Shivanand Shankar Mankekar||6,36,38,850||0.94%|
|23||Prashant Dharamdeo Singh jointly with Tushar Kumar||6,35,21,150||0.94%|
|24||KB Global Platform Fund||5,17,47,850||0.77%|
|25||Ivy Icon Solutions LLP||4,41,88,320||0.65%|
|26||Worldwide Healthcare Trust PLC||4,13,89,810||0.61%|
|27||Beta Oryx Limited||4,13,89,700||0.61%|
|28||Kotak Pre IPO Opportunities Fund||3,82,22,580||0.57%|
|29||B Capital Asia III LLC||3,75,09,120||0.56%|
API Holdings IPO Strengths:
- Through API Holdings Limited’s full stack connected presence across the healthcare value chain, it has entered into relationships with stakeholders across the value chain leading to network effects. API Holdings Limited’s value proposition for all stakeholders creates multiple self-reinforcing flywheels. Across its platform, the company serviced 3,261 wholesalers, 87,194 pharmacies, and 4,617 prescribing doctors and clinics for the month of June 30, 2021, and 926 hospitals for the three months ending June 30, 2021. As of June 30, 2021, the PharmEasy marketplace had 25 million registered users. The scale of the company’s platform, the breadth of its relationships with other stakeholders, and its expandable tech-ops infrastructure enable it to scale rapidly.
- API Holdings Limited owns the PharmEasy brand, which is a recognized consumer healthcare brand across the length and breadth of India. As per RedSeer Report, PharmEasy is India’s largest digital brand for the sale of pharma products and healthcare services, in terms of GMV of products and services sold on the marketplace in the financial year 2021. The company has licensed the “PharmEasy” brand to Axelia, which operates the PharmEasy marketplace in India. It also licenses the “PharmEasy” brand name and provides franchisor services, such as fulfillment, marketing, and digital enablement for franchisee-owned and operated offline pharmacies.
- API Holdings Limited has built a technology and data-driven platform that seeks to solve multiple problems across the healthcare value chain in India. Also, while the product development has been effortful, the open architecture and modern API connectors ensure easy and seamless integration with all the company’s partners’ systems. To support its technological capabilities, the company has a dedicated technology team of 481 employees. As a result of its coverage across the healthcare supply chain and traffic on its platforms, the company also accumulates substantial data. The analytics capabilities that drive real-time insights from this data, enable the company to assist its stakeholders and help them better understand market demand and supply trends and to optimize their decision-making. The company endeavors to attract new participants to its platforms, given these benefits, while successfully retaining existing ones.
- API Holdings Limited has a demonstrated record in acquiring and integrating companies, teams, and business models over the last few years. The management team has undertaken significant acquisitions in the last two years. The company has a dedicated M&A team that evaluates opportunities in the fragmented Indian healthcare market on a regular basis. Through acquiring both synergistic and complementary businesses, the company has sought to consolidate a fragmented market, increase its scale, enhance its capabilities and expand into adjacencies. This has enabled it to further increase value for its stakeholders across the healthcare ecosystem. For example, API Holdings Limited’s acquisitions of Thyrocare and Aknamed strengthened its position in diagnostic services and hospital supply.
- API Holdings Limited’s expansive pan-India supply chain infrastructure as of June 30, 2021 includes 82 warehouses, 10,886 warehousing personnel, and cumulative warehousing space of 699,000 sq. ft. This infrastructure currently undertakes 76,000 deliveries daily. The company also has 1,879 last-mile delivery partners for the month of June 30, 2021. For the month of June, 2021, 84.7% of the deliveries were made within 24 hours for metro cities. The company’s supply chain capabilities deliver operational efficiencies, lower delivery timelines, and increasing asset turnover ratios for its partners while continuing to deliver a superior customer experience.
- API Holdings Limited has successfully demonstrated consistent growth in scale across its businesses, which has enabled it to improve operating leverage and in turn improve its profitability profile. The company had a Pro Forma GMV of ₹7,865.48 crores in Fiscal 2021. The company’s revenue from operations grew by 249.8% to ₹2,335.27 crores in Fiscal 2021 from ₹667.54 crores in Fiscal 2020.
API Holdings IPO Risk Factors:
- Any failure by Axelia to operate the PharmEasy marketplace successfully could materially and adversely affect its business which in turn could adversely affect API Holdings Limited’s business, prospects, financial condition, cash flows, and results of operations.
- API Holdings Limited has licensed the “PharmEasy” brand to Axelia, which operates the PharmEasy marketplace in India. The company has also licensed the “PharmEasy” brand name to franchisees and provides franchisor services, such as fulfillment, marketing, and digital enablement for franchisee-owned and operated offline pharmacies Failure by the franchisees to provide quality service may damage its brand and reputation
- In Fiscal 2021, Ascent Health and Wellness Solutions Private Limited, along with certain other entities, were merged into API Holdings Limited, and it also acquired Medlife, both of which were significant acquisitions by the Company. During Fiscal 2022, the company acquired Aknamed and Thyrocare, both of which are also significant acquisitions. While these acquisitions have helped it expand the current businesses or get into new or adjacent businesses, there can be no assurance that the company will be able to achieve anticipated benefits from these acquisitions or successfully integrate them.
- API Holdings Limited faces intense competition across its business lines, and it competes against other online platforms, diagnostics companies, traditional wholesalers as well as other online and offline healthcare service providers. Some of its competitors may have longer operating histories, greater brand recognition, better supplier relationships, larger customer bases or greater financial, technological or marketing resources than the company does. If API Holdings Limited is unable to compete effectively, the business, financial condition, and results of operations of the company may be materially and adversely affected.
- API Holdings Limited has experienced losses from operations in the past. In Fiscals 2020 and 2021 and three months ended June 30, 2021, the company had restated losses after tax of ₹335.28 crores, ₹641.34 crores, and ₹313.89 crores, respectively. The company expects its operating expenses to increase in the future as it expands its operations. If the revenue does not grow at a greater rate than the expenses, the company may not be able to achieve and maintain profitability.
Objects of the Issue:
API Holdings Limited proposes to utilize the Net Proceeds towards the following objects:
- Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company and certain of its Subsidiaries;
- Funding organic growth initiatives;
- Pursuing inorganic growth through acquisitions and other strategic initiatives; and
- General corporate purposes.
API Holdings Limited IPO Prospectus:
- API Holdings Limited IPO DRHP –
- API Holdings Limited IPO RHP –