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Online drugstore PharmEasy, which bought diagnostic chain Thyrocare in June, aims to raise a billion dollars at a valuation of $9 billion in its initial public offering later this year, two people directly aware of the company’s plans said.

API Holdings Ltd, the parent of PharmEasy, will raise the entire amount by selling new shares, the people said on condition of anonymity.

They said none of its existing shareholders, including its founders and investors, will sell their shares in the IPO.

Great expectations
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Great expectations

Prosus Ventures, TPG Growth, CDPQ and Temasek are among PharmEasy’s top investors.

The decision not to cash out their stakes during the IPO indicates confidence among PharmEasy’s investors about the growth potential of the company and the online pharmacy market.

The growth potential has already drawn India’s largest conglomerates, including the Tata group and Reliance Industries Ltd, into the online pharmacy business.

“The entire proceeds of the listing will be used to pursue growth opportunities," one of the two people cited above said. “The company plans to make more acquisitions in the near future and has been on the lookout for suitable targets that match its long term objectives."

PharmEasy, founded by Dharmil Sheth and Dhaval Shah in 2015, has seen its valuation jump threefold in less than four months.

In April, it raised about $350 million from Prosus Ventures (formerly Naspers) and TPG Growth at a valuation of $1.5 billion, becoming the first Indian e-pharmacy unicorn.

On 26 June, API Holdings bought a controlling stake in Thyrocare Technologies for 4,546 crore.

Mint reported in June that PharmEasy hired Morgan Stanley and Kotak Mahindra Capital as advisers for its IPO.

In May, PharmEasy completed the acquisition of smaller rival Medlife to become India’s largest online pharmacy and healthcare aggregator. It currently delivers medicines in more than 1,000 cities in the country and offers diagnostic test services across all major cities and towns.

According to a report by consultant EY, the e-pharma space is estimated to grow at an annual average growth rate of 18.1% to reach $18.1 billion by 2023.

The growth will be driven by an increase in the targetable acute medicine market due to more efficient last-mile delivery through collaboration with local pharmacies and hyperlocal delivery companies, the report said.

Several large groups have entered the online pharmacy segment through acquisitions and organic play.

In August last year, Mukesh Ambani-led Reliance Industries acquired a majority stake in Chennai-based online pharmacy Netmeds (Vitalic Health Pvt. Ltd) for 620 crore.

In June, Tata Digital Ltd, a unit of Tata Sons Pvt. Ltd, picked up a majority stake in digital health company and e-pharmacy 1MG Technologies Pvt. Ltd. In August last year, US online retail giant Amazon launched its online pharmacy in India.

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