PharmEasy rights issue oversubscribed, raises close to ₹4,000 crore

PharmEasy rights issue has been oversubscribed with the health tech major raising a little north of ₹3,950 crore from the issue. The issue saw Ranjan Pai committing the largest amount at ₹1,300 crore with the remaining ₹2,650 crore odd raised from existing investors who had the first right to infuse capital and employees.

The company has received around ₹2,000 crore from the rights issue while the remaining funds such as the commitment from Pai who has made the investment in his personal capacity is awaiting CCI approval.

Siddharth Shah of PharmEasy said this fund raising exercise is likely to be largest down round in the Indian start up world with a testament to the company's standing.

While final allocation and shareholding pattern will be clear only once the funds come in Pai is expected to hold around 15% stake in health tech start up.

While Shah remains tight-lipped on the valuations, Pai’s investment of ₹1,300 crore for 15% values the company at $1 billion, a far shot from the $5.6 billion peak valuations the company enjoyed but an improvement from the lows of $650-700 million it had touched.

The funds from the rights issue will be used to pare down existing debt and the remaining funds for organic growth. Currently, Pharmeasy has roughly $285 to $300 million of debt from Goldman Sachs which was procured via NCDs. The debt from Goldman Sachs was taken on in June 2021 to fund the Thyrocare acquisition but the covenants of equity raising were not met.

The first bond from the Goldman Sachs loan is due immediately with the next bond due in the next 12 months. The repayment of debt will eventually reduce the promoter pledge which stands at 100% in Thyrocare.

Meanwhile, when it comes to IPO plans, Shah says listing is still on the cards but the timeline is not decided. The company which has around 20,000 shareholders he points out already works as a listed company with the high governance and regulatory protocols followed.

Listing he says will depend on performance. The Indian market he points out is now looking for profit along with growth. PharmEasy he points out is on its way to profitability having generated an EBITDA of ₹60 crore in Q1FY24 with the trend sustaining.