35.

36.

Foreign investments into Indian companies are regulated by the Government of India and the Reserve Bank of India
(“RBI”). For example, under its consolidated foreign direct investment policy (effective from October 15, 2020) (“FDI
Policy”), Foreign Exchange Management Act, 1999 and the rules and regulations thereunder, each as amended (“FEMA”),
the Government of India has specific prescribed requirements and conditionalities with respect to the level of foreign
investment permitted in certain business sectors both without prior regulatory approval (the “Automatic Route”) and with
prior regulatory approval (the “Approval Route”).

Our Company is in the healthcare services business and several of our Subsidiaries are in the manufacturing, cash and carry
wholesale trading and wholesale trading businesses, where 100% foreign direct investment is permitted under the
Automatic Route. However, some of our Subsidiaries are engaged in business sectors which fall under the Approval Route,
or where foreign investment is subject to sectoral conditionalities, including retailing of pharmacy and wellness products,
and e-commerce.

Presently, our Company is owned (with shareholding of non-residents being less than 50%) and controlled by resident
Indian citizens, and accordingly any foreign investment in our Company is not considered to be an ‘indirect’ or
‘downstream’ foreign investment in our Subsidiaries. Accordingly, the total foreign investment in our Company cannot
exceed 49.9% of our Company’s share capital, and foreign investors cannot be deemed to own and control our Company.
This may restrict our ability to raise capital in the future or in the ability of foreign investors to purchase Equity Shares.
Further, pursuant to our Articles of Association, our Company is required to remain an Indian owned and controlled
company so long as certain investors remain shareholders in our Company.

The Government of India has made and may continue to make revisions to FEMA and the FDI Policy. In the event of any
adverse amendments to the FDI Policy or FEMA in the future, our ability to develop our business, take advantage of
acquisition or other growth opportunities or raise capital through foreign investment in a timely manner or at all may affect
our business, financial conditions and results of operations.

We are dependent on the continued services and performance of our senior management and other key employees,
the loss of any of whom could adversely affect our business, operating results and financial condition.

Our future performance depends on the continued services and contributions of our senior management, and other key
employees to execute on our business plan and to identify and pursue new opportunities and product innovations. The
failure to properly manage succession plans and/or the loss of services of senior management or other key employees could
significantly delay or prevent the achievement of our strategic objectives. The loss of the services of one or more of our
senior management or other key employees for any reason could adversely affect our business, financial condition and
operating results and require significant amounts of time, training and resources to find suitable replacements and integrate
them within our business, and could affect our corporate culture.

We are in an industry that is highly competitive, and any inability to compete successfully against current and
future competitors may adversely affect our business, financial condition and results of operation.

Pharmacy retail businesses typically compete with other drugstore chains, online retailers, independent pharmacies,
pharmacies attached to hospitals and medical groups. We have competitors with longer operating histories, larger customer
bases, greater brand recognition, greater experience and more extensive commercial relationships in certain states, and
greater financial, technical, marketing and other resources than we do. Our primary key competitors are Apollo Pharmacy,
Wellness Forever, Pharm Easy, Tata Img and NetMeds. See “Industry Overview - Comparison of Certain Metrics of
Players in the Pharmaceutical Retail Industry ” on page 140.

The table below sets forth certain metrics of us and our peers in the pharmaceutical retail industry as of the period/years
indicated:

 

 

 

 

 

 

 

 

Revenue from Operating
Operations EBITDA Stores Operated
CAGR between Financial Years Financial Year | Financial Year | Financial Year
2019 to 2021 2019 2020 2021

Apollo Pharmacy 20.20% 33.30% 3,428 3,766 4,118
MedPlus 16.20% 63.20% 1,653 A775. 2,081
Wellness Forever 16.80% 19.7%* 139 172 223
API Holdings N/A N/A N/A N/A N/A
Tata Img 23.70% N/A N/A N/A N/A
Netmeds N/A N/A N/A N/A N/A

 

 

 

 

 

 

 

 

Source: Primary Research, Secondary Research, Company filings, Technopak Analysis

Note: API Holdings operates Pharmeasy and Medlife among other businesses, Consolidated financials for API Holdings includes their retail, diagnostics,
and distribution business so like to like comparison may not be possible
