Last week, e-commerce giant Amazon, also made an entry into the online pharmacy space, launching its service to deliver prescription drugs in Bengaluru through its largest seller Cloudtail.
Reliance Industries said on Tuesday that its subsidiary Reliance Retail has acquired a majority equity stake in Netmeds' parent Vitalic for approximately Rs 620 crore giving the Mukesh Ambani-led group a 60% stake in the Chennai-based company. In a midnight stock exchange filing, RIL said that it will also get a 100% direct equity ownership of Netmeds' subsidiaries, Tresara Health, Netmeds Market Place and Dadha Pharma Distribution.
"This investment is aligned with our commitment to provide digital access for everyone in India," said Isha Ambani, director of Reliance Retail Ventures."The addition of Netmeds enhances Reliance Retail's ability to provide good quality and affordable healthcare products and services, and also broadens its digital commerce proposition to include most daily essential needs of consumers," she added.
Pharmeasy, Medlife merger
Earlier on Tuesday, ETtech broke the news that online medical store PharmEasy has agreed to merge with smaller rival Medlife, filings with India's antitrust body show. The move heralds the first big consolidation play in a sector that has seen heightened competition and entry of deep-pocketed players like Reliance Industries and Amazon.
Medlife will sell 100% shares to API Holdings, the parent entity of PharmEasy, in return for 19.59% ownership in the combined entity, according to the filing with the Competition Commission of India (CCI). Both firms have formally requested CCI to approve the proposed merger.
ET has reviewed a copy of the filing. Sources in the know of the deal details pegged the valuation of the combined entity at $1.2 billion, which values the stake of Medlife shareholders at around $235 million.
PharmEasy was valued at around $700 million when it closed a $220 million funding round led by Singapore's Temasek in November. It is as yet unclear if the transaction is a purely stock-swap deal. PharmEasy and Medlife did not respond to ET’s queries till press time Tuesday.
Mumbai-based PharmEasy – backed by Temasek, CDPQ and Orios Venture Partners – is looking to line up financial investors, including US private equity firm TPG – which has a strong healthcare focused portfolio, to invest in the combined entity.
"The proposed combination relates to the acquisition of 100% equity shares of Medlife by API Holdings, and as consideration, the acquisition of up to 19.59% of the equity share capital of API Holdings (on a fully diluted basis), by the Medlife Promoter Shareholders and other shareholders of Medlife," the filing read.
Medlife was founded by Tushar Kumar, son of Alkem Laboratories owners Prabhat Narain Singh and Prashant Singh,
Ananth Narayanan, who was appointed Medlife CEO in August last year, will stay on as an advisor for some time even after the deal is closed, sources added. Narayanan had also invested in Medlife in his personal capacity and had assumed the position of cofounder as well.
Last week, e-commerce giant Amazon, also made an entry into the online pharmacy space , launching its service to deliver prescription drugs in Bengaluru through its largest seller Cloudtail. While the service is still being rolled out for customers in the city, the company has plans to expand beyond Bengaluru within the next few months.
Despite the rush of new entrants, the fledgling sector continues to be beset by legal challenges, in the absence of a clear regulatory framework from India’s policymakers. The delay in notifying the epharmacy draft rules has continued to cause concerns among the companies, as well as with investors, who have pumped in millions into the sector.
Industry associations that claim to represent offline brick-and-mortar players, have accused the online pharmacies of muting competition and contributing to high drug prices in the country.
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