"Thyrocare has an outstanding backend, they are leaders in cost control. We have a reach that can cover 70% of India within 24 hours," said Siddharth Shah, Co-founder & CEO of API Holdings. (Representative image)
In a first of its kind, an unlisted startup eyeing an IPO has acquired a listed company. PharmEasy’s API Holdings has announced the acquisition of Thyrocare. Dr Velumani will exit Thyrocare completely but will invest in API Holdings as part of the larger deal. Moneycontrol’s Nisha Poddar, who first broke the story, caught up with Siddharth Shah, Co-founder & CEO of API Holdings on the deal dynamics.
Edited excerpts -
What’s the rationale of the deal?
Thyrocare has an outstanding backend, they are leaders in cost control. We have a reach that can cover 70% of India within 24 hours. PharmEasy is the leader in technology services today for healthcare in India. It is the best largest platform we have with over 17 million monthly active users and more than 50-60,000 medicine orders are delivered every single day. We have a network of 80,000 pharmacies and 6,000 doctors across India . We believe it is a perfect complimentary strength to complete digital-led holistic healthcare platform in India, that can cover information, consultation, tests and treatment. But the idea is now these can cover test along with treatment in a big way. I believe that 70% of India's population can now be covered with either a medicine or a test with a turnaround time of less than 24 hours with world-class technology and service coming at your doorstep.
What are the synergistic benefits of this acquisition?
A significant number of patients require test as well as treatment and Thyrocare is today a leader in wellness, which is a very chronic part of what one needs for maintaining their health and wellness. I think PharmEasy is the go-to platform for everybody and we believe Tyrocare also has a significant B2B network. On top of the B2B network, we can create an outstanding B2C network as well. We can leverage our pan-India strength to make it happen.
Is Dr Velumani also investing in API Holdings as part of the transaction?
Dr Velumani will make an investment of Rs 1,500 crore to buy 4.9% in API Holdings. This transaction is separate from the acquisition deal.
How are you planning to fund this large acquisition?
We have significant investment coming in from our existing and new shareholders and there is already cash from the previous rounds, and there is some other committed funding. So, we are well set to make this happen.
API Holdings is planning for an IPO, so will there be two listed companies or will Thyrocare be delisted? If open offer is fully subscribed then the promoter holding will be much higher than SEBI norms. Your comments.
API Holdings is planning an IPO in 12-18 months; this acquisition will beef up our portfolio ahead of the listing. On the point of number of listed entities, all options are on the table, and we will cross the bridge when we get there. The board will consider all options and take the right decision.
What has been the role of Aditya Puri in this deal?
Aditya Puri is on the board of API Holdings. For me he is a mentor and an advisor and his views are valuable.