Coinciding with Pride 2021, as PharmEasy acquires Thyrocare, we see how the Indian healthtech sector is estimated at a $2.7 billion market growth by 2023. As fortune favored the industry, we see Covid-19 has incredibly boosted the sector with a massive proliferation of online pharmacies. Regular medical shops that had plans to stay offline now popped up to deliver medicines at the doorstep in abidance with the law of social distancing. The pharmaceutical industry regained the spirit to dominate peers with the advent of the pandemic.
The 20-Year-Old Thyrocare
Thyrocare Technologies Limited was established on January 28th, 2000. The brand is one of India’s most well-known diagnostic chains, offering a wide range of medical diagnostics and test profiles aimed at early detection and treatment of disorders and diseases. Thyrocare’s Centralized Processing Laboratory (CPL) conducts esoteric tests (analysis of rare substances or molecules not performed in regular clinical outfits) is spread across India. Thyrocare allows laboratories to provide their clients with the most cutting-edge diagnostics at an affordable price.
No BARC, Only Arokiaswamy Velumani
The man behind Thyrocare, Arokiaswamy Velumani, is no short of a genius. Born in a village in the outskirts of Coimbatore, Tamil Nadu, Velumani plowed odds to earn a Bachelors in Science and subsequently a job at Gemini Capsules, a local pharmaceutical firm in Coimbatore, where he earned Rs 150, which is $1 and a half as of 2021. After four years, he joined the Bhabha Atomic Research Centre (BARC) in Mumbai as a lab assistant. From there, he retired early to withdraw his provident fund of Rs. 1 lakh ($1500 approx as of 2021) to start Thyrocare.
The first Thyrocare facility opened in Byculla, Mumbai, with an emphasis only on thyroid testing. It has since expanded into other diagnostic fields, such as diabetes, sexually transmitted diseases (STDs), infertility, and cardiovascular ailments. The firm is one of the largest thyroid testing companies in the world, with locations throughout India, Nepal, Bangladesh, and the Middle East. It also happens to be India’s largest healthcare diagnostic lab, with over nine million samples processed and over 30 million medical tests performed each year.
Indian Healthtech Startup PharmEasy
PharmEasy is the only Indian health-tech startup among the 16 startup unicorns in India as of June 2021. Established in 2015, PharmEasy is an e-commerce portal for medicines and paramedical supplies. PharmEasy realized early that its success is in building a robust healthcare delivery platform, making it easy for patients to order medicine at the doorstep. And very intelligently, it didn’t build any warehouse; it just networked with local pharmacy stores and retailers for regional growth.
PharmEasy & Thyrocare Acquisition
After PharmEasy acquires Thyrocare, in a Linkedin post, the PharmEasy Founder, Dhaval Shah, said, “We are now the proud “Students “of Thyrocare Technologies Ltd. (not acquirers/buyers) and are taking the 1st step towards learning to make affordable, reliable and quality testing through our partners across the country a reality!! PharmEasy and Thyrocare.“ This is a unicorn’s first acquisition of a publicly-traded company (Thyrocare) for a 66.1 percent stake for Rs. 4,546 crores (about $610 million). DocOn Technologies Pvt. Ltd, a unit of PharmEasy’s parent API Holdings Ltd, has also proposed to acquire an additional 26% stake in Thyrocare for Rs 1,300 per share.
According to media reports, as part of a series of equity transactions by existing and new API investors, Thyrocare chairman A. Velumani will also invest close to Rs 1,500 crore in API Holdings for a 5% stake. After acquiring Medlife, the PharmEasy-Thyrocare partnership at an opportune moment syncs with the Tata-1mg deal, Reliance-Netmeds, ahead of an IPO in a dozen of months. Reports have it that Mumbai-based Suburban Diagnostics is also attracting all the hots from Dr. Lal Pathlabs, Metropolis and PharmEasy, again.
BYJU’s acquisition of 33-year-old Aakash, Groww’s acquisition of 20-year-old Indiabulls Mutual Fund, and BharatPe’s bid for 38-year-old troubled PMC Bank are testimonials that age is just a number. PharmEasy, which has been around for six years, has a network of 80,000 stores and 6,000 physicians. Thyrocare’s system of 3,300 diagnostic centers spread over 2,000 towns and cities in India makes PharmEasy age in collective experience than as incorporation.
With plans to increase its ecosystem of pharmacies from 80,000 to 1,20,000 by the end of 2021, across 100 Indian cities, why do we see a bear in the stock value after PharmEasy acquires Thyrocare?