Pharmeasy withdraws IPO that it had made on November 9th 2021, going ahead with Rights Issue as its strategy to raise funds
API Holdings withdraws IPO made on 9th November 2021
According to the development of reports, it is noted that, digital pharmacy platform PharmEasy’s parent company API holdings has gone ahead and withdrawn the Draft Red Herring Prospectus which it had filed with SEBI in November 2021.
Since the market was seeing a boom in 2020 and 2021, due to Covid, the company must have thought it as the right time to give out its first IPO. But, as 2022 came, the medical market’s boost got reduced, as the impact of covid started diminishing. As the market conditions fell drastically in the past quarter, the digital pharmacy company decided to defer from its IPO plans.
However, it is noted that, the company has already come up with alternate strategies to raise funds. It is being heard in the market that, the strategy that the company is looking to deploy is Rights Issue. What’s Right’s Issue? Let’s find out below.
The alternative strategy – The Rights Issue
Credits: Swarit Advisors
A rights issue is a distribution of subscription rights to purchase new stocks in a firm to the holders of its existing securities. When the rights are for equity securities, such shares in a public business, it may be possible to raise money in a non-dilutive pro rata manner.
According to the reports, Pharmeasy’s rights issue will comprise of preference shares, which will be priced around 100 rupees each. It is believed that, the rights issue will be open for the share holders from September 2022.
PharmEasy’s collaboration with easy payment systems
The digital pharmacy platform is always on the hunt to better its technology, to enable a user-friendly interface for the benefit of its customers. Out of such a vision, the platform went on to collaborate with Cashfree Payments. The main intension was to deliver quick and simple payment settlements to its retail partners.
Essentially, the online pharma platform enables third party retailers to sell their pharmaceuticals across the market, acting as a middleman. The collaboration with easy payments is tipped to do wonders for the retail business as it gives them a varied range of options to complete the payments.
What do you think of the withdrawal of IPO by API holdings? Do you think Right’s Issue is the correct alternative strategy deployed? Share your thoughts in the comment section below. Also if you like the content in the article, then please share it with your family and friends
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