PharmEasy to Raise INR 3,500 Cr via Rights Issue to Address Debt & Financial Challenges

Investors such as Temasek Holdings, TPG, Prosus, CDPQ, Eight Roads, LGT, ADQ, Amansa, and OrbiMed have all committed to invest a minimum of INR 2000 Cr to PharmEasy's endeavor.

PharmEasy, an omnichannel pharmacy chain in the health tech sector, has outlined its plan to raise a substantial INR 3,500 Cr through a rights issue to pare its financial burden. 

The initiative aims to meet a significant portion of the debt owed to Goldman Sachs, marking a pivotal step in the company's financial restructuring.

The capital infusion is gaining momentum as prominent investors rally behind the cause. As reported by LiveMint, a group of investors, including TPG, Prosus, CDPQ, Eight Roads, LGT, ADQ, Amansa, and OrbiMed, have pledged INR 2,000 Cr to PharmEasy's endeavor. 

Additionally, Ranjan Pai's family office, founder of Manipal Health Enterprises, is prepared to invest INR 1,200 Cr in the company.

This concerted effort comes after API Holdings, PharmEasy's parent organisation grappling with debt, decided to pursue a rights issue worth INR 2,000-3,000 Cr.

The primary goal is to address its financial obligations and set the stage for sustainable growth.

PharmEasy's multifaceted approach to healthcare services encompasses online pharmaceutical sales and diagnostic tests. Founded in 2015 by a team of visionaries - Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah, and Hardik Dedhia - the startup has secured over $1.5 billion in funding across various funding rounds.

In light of previous financial missteps, including breaching loan covenant terms with Goldman Sachs, PharmEasy's decision to raise equity capital holds strategic significance. These funds will offset the existing debt, notably the financial obligations to acquire Thyrocare.

The company's financial struggles have also impacted its valuation, leading to markdowns by notable investors such as Janus Henderson and Neuberger Berman. As part of its efforts to regain financial stability, PharmEasy has resorted to a series of layoffs, with nearly 500 employees affected.

Despite the challenges, PharmEasy's operational performance has shown resilience. In the fiscal year 2022, the company recorded a consolidated revenue of INR 5,729 Cr, marking a substantial increase from INR 2,235 Cr in the previous fiscal year.