API HOLDINGS (PHARMEASY) – DRHP SUMMARY

Allegro Capital Pvt Ltd

November 2021
Strictly Private & Confidential
Target Addressable Market

Indian
API currently Healthcare
addresses Market
OPD Market Size
(~40% – 2020
of the (INR Trillion)
Healthcare Industry)
▪ OPD Healthcare, INR 4.2
Trillion market, is split
across pharma,
diagnostics, OTC,
consultations and hospital

Pharmeasy’s Serviceable Market in 2020: INR 4.2 Trillion treatments

▪ Pharma and consultation
cover 38% and 16% of OPD
market respectively

Indian Healthcare Market Size – 2025 (INR Trillion)

14% 21% 9% 15% 14% 17% 18% 14%

CAGR vs 2020

Pharmeasy’s Serviceable Market in 2025: INR 7.5 Trillion

Source: RedSeer Report

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Pharmeasy – Overview

Network User Mix Operations Financials

87,194 25 Mn 8.8 Mn INR 78.5 Bn

Active Pharmacies Reg. User Base Orders fulfilled* Total GMV*

3,261 2.4 Mn 565,000 INR 43.2 Bn

Active Wholesalers Pharmeasy Users* Daily clinical Tests* Pro Forma Revenue*

4,617 79% 10.7 Mn 5%

Prescribing Doctors Repeat Users Rx Prescriptions Overall Contribn %

82 58% 97.3% 50%+ share

Owned Warehouses From Tier-II, III cities Pin Code Coverage Distribn business

92 3.4 Mn 1,912 -8%

Hospitals Serviced Tele-consultations Delivery partners Marketing cost

*Numbers for FY21

Except these all numbers are for Jun-22

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Evolution of Pharmeasy

Developed Integrated Pharmacy Ecosystem Added Complimenting Healthcare Services

Commenced Created the Launched EMR

operations Pharmeasy solution for Acquired Med
Tech-enabled
Dial-in Market place doctors life to
supplier of
Pharmacy consolidate
medical
position
consumables

2012 2015 2017

2020 2021

2013 2016 2019

91 streets, Ascent Acquired India’s ERP system for

and other Op largest Pharma
Added Pharma Online Pharmacy ERP entities merged to Diagnostics Retailers and
distribution platform to Solution form API company (By Wholesalers
business integrate volumes)
channel

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Offerings across the Healthcare Value Chain

EMR & E-consultation

Clinics / Doctors

Pharmacy ERP

Pharma Companies Wholesalers Pharmacies Consumers

Online Pharma Platform

Diagnostics Labs Hospital Supplies

Pan India Tech-enabled

Diagnostic Chain hospital supplies
procurement

Online Marketplace for Pharma and Healthcare Service

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Key Acquisitions Summary

Acquisition Date January, 2021 September, 2021 September, 2021 October, 2021

Business Acquired Online Pharmacy and Diagnostics Brick and Mortar Diagnostics chain Supplier of medical products to Largest ERP provider for
market place Hospitals Pharmacies and Wholesalers

Rationale Consolidate position as market Backward integrate diagnostics Enter medical product space in Leverage tech-user base and
leader business hospitals and medical centres integrate with API’s ecosystem

Transaction API acquired 100% stake API acquired 71.22% stake API acquired 67.30% stake; Right to API acquired 49.17% stake; Right to
acquire balance at same price acquire balance at same price

Allotted ~5% stake to A. Velumani Allotted 0.4% stake to Aknamed

in exchange of INR 1,500 Cr shareholders in exchange of INR
132 Cr

Consideration INR 1,083 Cr (shares) Cash Transfer – INR 4,895 Cr Cash Transfer – INR 308 Cr Cash Transfer – INR 255 Cr

Cash Infusion – INR 369 Cr

Valuation Equity Val ~Rs 1,083 Cr Equity Val ~Rs 6,874 Cr Pre money Eq. Val ~Rs 678 Cr Equity Val ~Rs 518 Cr

Post money Eq. Val ~Rs 1,047 Cr

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Pharma Business

Pharma Cos/ Wholesalers

Pharma, OTC & Private Label medical

products, surgical & Consumables

API (Pharmeasy) Third Parties API (Pharmeasy)

Retailio is digitizing Supply Chain Last mile fulfilment &

warehousing
− Real time price discovery
− Inventory visibility
− Confirmation and payments Pharmeasy Marketplace (Axelia)
Pharmeasy Retailio (IP) − Logistics

Retailio (3P)

Retailers Chemists/ Institutions* Chemists/ Institutions Consumers

GMV (INR Cr.) GMV (INR Cr.) GMV (INR Cr.) GMV (INR Cr.)
5,205
2,101 3,128
2,074
1,554 1,672 2,342
1,993 2,714
1,066
1,033 714

FY20 FY21 Q122 (A) FY20 FY21 Q122 (A) FY20 FY21 Q122 (A) FY20 FY21 Q122 (A)

• 87%+ Delivery in Full & on time *Institutions include pharmacies, hospitals, • 87k+ pharmacies (11% of total) • 0.24 Cr. Annual Transacting Users
doctors, clinics & medical centres
• 95%+ Estimate Delivery Date • 3.2k+ wholesalers (5% of total) • 0.44 Cr. orders fulfilled in Q122
adherence • 221k+ SKUs • 79% order from repeat customers
• 97% Fill Rates • ~3.5k Pin codes (17% of total) • 65% order fulfilment by API
Pharmeasy’s private label brands: ‘Liveasy’ and ‘Everherb’ targeting OTC, (Pharmeasy)
wellness, multivitamins, orthopedic & diabetic care products • 97% pin code coverage

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EMR & Tele-Consultation

API (Pharmeasy) • Docon was acquired in

2016 as ecosystem wide
solution to address lack
of access to doctors,
issue of self-medication
Docon Docon DocStat
and low digitization of
EMR Services for Doctors / Clinics Tele-Consultation for Patients prescriptions and medical
records.
Prescriptions (Mn) Teleconsultations (Mn)
6.4
16.4

10.7
3.4

FY21 Q122(A) FY21 Q122(A)

• Used by 4,600+ Doctors • Tele-consult with doctors

• Customizable prescriptions • E-Booking of appointments
• Can capture patients’ Health Record • Access prescription and other records
• Helps co-relate symptoms to possible diagnosis
• Manage clinic

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Diagnostics Business

Key Metrics Diagnostics GMV (INR Cr.) ▪ Diagnostics business was

720 strengthened through
283 Diagnostic Tests
acquisition of Thyrocare
531
470
▪ Thyrocare is one of the
17 Owned Diagnostic Labs
largest test provider in
terms of volumes with
4,500 Diagnostics Collection Centres
one of the lowest cost of
testing
16 Inhouse pathologists
FY20 FY21 Q222 (A)

889 Inhouse phlebotomists

Thyrocare Acquisition Multiples

Daily Clinical Investigations in FY21 Acquisition Multiple INR Cr.

565k
Acquisition Share Price (INR) 1,300

Districts covered # of shares acquired (ex Open Offer) 34,971,141

550
Consideration paid 4,546

Samples sourced (Q2FY22 Annualized) Stake acquired 66.1%

2.5+ Cr.
Equity Value 6,874

Tests processed (Q2FY22 Annualized) Net Debt (58)

11.2+ Cr.
Enterprise Value 6,816

B2C share of revenue during H1FY22 H2-FY21 Annualised EBITDA 202

~16%
EV/ EBITDA 33.7x

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Hospital Supplies

Overview and Potential Synergies GMV (INR Cr.) ▪ With Aknamed’s

950
▪ Tech-enabled supplier of pharma, consumable & surgical acquisition, API made

products to hospitals (926 hospitals, 19k+ SKUs) foray into Hospitals

Synergies/ 606 supplies business

▪ Products & presence in specialty therapies offers API

holdings the capabilities to roll out chronic care programs
(including integration with Thyrocare for Oncology)
▪ Cross-sell products to pharmacies on Retailio 26

FY20 FY21 Q122(A)

Aknamed Acquisition Multiples

Acquisition Multiple INR Cr.

Key terms of the Transaction
- Primary 369
▪ 100% economic interest held by API
- Secondary 332
▪ Call option with API to acquire balance ~33% stake by FY24
Total Consideration paid 701
― @ same valuation subject to target EBITDA
Stake acquired 67.3%
achievement
Pre-Money Equity Value 678
▪ Corresponding put option with minority shareholders
Net Debt (30-Jun-21) 266
▪ Aknamed promoters subscribed to API share capital
Enterprise Value 944
GMV (FY21) 606
amounting to INR 132 Cr., holding 0.4% stake

Equity Value/ 1.6x

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Pharmeasy’s Current Marketplace Structure

JM Financials API (Pharmeasy) Mathew Cyriac

68.99% 19.99% 11.02%

Procurement, Warehousing,
Last-mile delivery* of pharma 100%
products, in exchange of 10%- Aarman solutions Threpsi
20% commission

100%
“Pharmeasy” Brand and Tech
IP licensed in exchange of
Royalty of 1% of GMV

Axelia

Lists the Pathology Markets the brand Lists the Teleconsult

services for 10% fees Pharmeasy services for agreed fees

Axelia provides a Branded, Tech-enabled retail platform, outsourcing order fulfilment services

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Consolidated Pro-forma Income Statement

INR Crs. FY21 Q1FY22 FY21 Q1FY22

Revenue 4,319 1,569 100% 100%
Cost of goods sold -3,513 -1,303 -81% -83%
Material Cost -162 -52 -4% -3%
Gross Margin 644 214 15% 14%
Employee Benefit -528 -186 -12% -12%
Other Expenses -920 -287 -21% -18%
EBITDA -804 -260 -19% -17%
Normalised EBITDA# -772 -259 -18% -16%
Other Income 44 22 1% 1%
Depreciation -297 -131 -7% -8%
Finance Cost -447 -45 -10% -3%
Exceptional Items - -5 0% 0%
PBT -1,504 -419 -35% -27%
Tax -44 -6 -1% 0%
PAT -1,548 -425 -36% -27%

*Includes financials of Thyrocare (acquired on Sep 2, 2021, Aknamed (acquired on Sep 17, 2021) and Vardhaman (acquired by Aknamed on May 12, 2021)
# Adjusted for IND AS 116, ESOP and Fair value changes
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Proforma Margin Breakup

Pro-forma API Holdings FY21 Q1FY22

Revenue from operations 100.0% 100.0%
Less:
Cost of Materials consumed (3.8%) (3.3%)
Stock Traded (81.3%) (83.1%)
Warehousing & Lab Cost (A) (8.1%) (6.9%)
Other Direct Cost (B) (1.8%) (1.8%)
Contribution Margin 5.0% 5.0%

(A) Warehousing & Lab Cost includes direct labor cost

(B) Other expenses includes manpower charges, contractual payment for delivery
associates, water, utilities and repairs

▪ Sales and Promotion cost*

- FY21 :- (5.8%) of Revenue
- Q1-FY22 :- (7.9%) of Revenue

*Doesn’t take effect of Thyrocare, Aknamed, Marg

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Consolidated Pro-forma Balance Sheet

INR Crs. 30-Jun-21

Gross Block
Net Block 292
Goodwill 8,360
Intangibles 703
Right-of-use (net of Lease Liabilities) 14
PPE 9,369
Working Capital
Inventory 684
Receivables 667
Other Current Assets 367
Payables -418
Other Liabilities -895
Provisions -41
Net Working Capital 363
Investments 5
Non-current Tax Assets 37
Current Tax Liabilities -17
Other Financial Assets 68
Other assets 213
Deferred Tax Liabilities (Net) -191
Contract Liabilities -17
Net Debt
Borrowings -2,643
Cash & Cash Equivalents 909
-1,735
*Includes financials of Thyrocare (acquired on Sep 2, 2021), Aknamed (acquired on Sep 17, 2021) and Vardhaman (acquired by Aknamed
Net Assets 8,094 on May 12, 2021)

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Valuation Movement

Funds Raised Pre-Money Eq

USD million Investors Stake
(INR Cr) Value (INR Cr)
Amansa, SARV Investment, Orbimed, Steadview Capital, Neuberger
Oct 2021 1,701 5.2% 31,100
Berman, Janus Henderson, Others
Sep 2021 Naspers, TPG, Temasek, B Capital Asia, Kotak, A. Velumani 3,092 11.3% 24,225
Apr 2021 Naspers, Others 1,172 13.6% 7,456
Mar 2021 TPG, CDPQ 474 6.9% 6,439
Jan 2021 Eight-Road, F-Prime, TIMF, Lightstone, Temasek, Medlife Shareholders 1,263 19.6% 5,176
Nov 2020 Lightstone, Fundamentum Partnership 36 0.9% 4,070

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Shareholding and IPO Issue

Shareholding Pattern as on 5th Nov, 2021 IPO Issue Size

Name of Shareholders No. of Shares % holding* ▪ Fresh Issue of INR 6,250 Cr to be utilized for :-
Naspers Ventures BV 813,316,570 12.04%
- Debt repayment (INR 1,929 Cr)
Temasek 732,516,290 10.84%
- Organic growth initiatives (INR 1,259 Cr)
Surbhi Singh (Erstwhile Medlife shareholder) 452,780,680 6.70%
- Inorganic growth through acquisitions (INR 1,500 Cr)
TPG Growth 449,492,340 6.65%
- General corporate spending (INR 1,812 Cr)
Evermed Holdings Pte Ltd 396,033,000 5.86%
A. Velumani 305,781,960 4.53% ▪ No shares offered for sale
CDPQ Private Equity 280,092,780 4.14%
▪ A Pre-IPO round of INR 1,250 Cr is optional; IPO Issue size will be reduced by
Lightstone Fund 261,229,320 3.87% amount raised in pre-IPO round
TIMF Holdings 211,200,660 3.13%
▪ Last funding in Oct-2021 was raised at a pre-money equity valuation of (INR
Bessemer India Capital Holdings II Ltd 210,363,670 3.11% 31,684 Cr) USD 4.3 Bn
The Fundamentum Partnership Fund I 121,693,330 1.80%
Eight Roads Ventures India III LP 120,985,260 1.79%
Shivanand Shankar Mankekar HUF 91,596,340 1.36%
Siddharth Shah 89,176,340 1.32%
Orios Venture Partners Fund – I 84,897,120 1.26%
SARV Investments Limited 82,779,620 1.23%
ESOP - Pending to be issued 659,358,260 9.76%
Others 1,394,174,650 20.63%
Total 6,757,468,190 100.00%

* Diluted for ESOP pending to be issued

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 APPENDIX

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Industry Trends - Organized Pharma Distribution and E-Health market

India’s organized pharmacy is growing faster India’s pharmacy market is largely unorganized
▪ E-health market has been further
buoyed by covid led disruption
173 50%
▪ Digital penetration in E-health is only at
2%, indicating high growth headroom

▪ In e-Pharmacy, online penetration in

77 India was ~2% in 2020 – considerably
lower than China (10-15%), US (30-35%)
10%

2018 2020 USA India

Organized pharma and OTC Distribution Industry (INR Bn) Market share of Organized players

Rapid growth in E-Health market Pharma and OTC comprise ~90% of E-health market

89 eConsultation, 6%
eDiagnostics, 4%

32 ePharma,
eOTC, 35%
55%

2018 2020

India’s E-Health Market (INR Bn) Split of India’s E-Health Market

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