Pharmeasy planning ₹2,500 cr round to retire debt
- Pharmeasy is now being valued at $500-600 million, said one of the person cited above, adding that the company will be the first unicorn to take a major knock down in its valuations. In 2021, when it last raised primary capital, the e-pharmacy was valued a whopping $5.6 billion
Pharmeasy, an omnichannel pharmacy retailer, is seeking to secure ₹2,500 crore to retire its senior debt obtained from global banking giant Goldman Sachs, according to two people familiar with the matter. While ₹1,000 crore will be infused by the family office of Ranjan Pai,the chairman of Manipal Education and Medical Group, Pharmeasy’s existing investors are expected to invest the rest, they added.
The firm is likely to offer a rights issue to raise fresh capital. It will be the second rights issue in 12 months. In October 2022, the firm’s existing investors were invited to subscribe to ₹750 crore via convertible notes. Pharmeasy counts Tiger Global, B Capital, Temasek, Orios, Prosus and Kotak PE, among its investors.
“Pai’s family office has given a term sheet of ₹1,000 crore, it is raising another ₹1,000 crore from existing investors,” one of the two people said seeking anonymity. Under the terms of the deal, Pai’s family office will own an 18% stake in the company, making it the single largest shareholder.
The primary capital will go towards retiring the debt from Goldman Sachs. The company is being valued at $500-600 million, a second person said. It will be the first unicorn to take a major mark down in valuations, he added. “The current valuation is a tenth of its valuation 24 months back. But it is good that Pharmeasy is ready to take a hit to survive.”
Under the terms of the debt agreement, Pharmeasy is obligated to repay the structured loan of ₹2,280 crore to Goldman Sachs by 2026, besides a quarterly interest payment of ₹25 crore. That apart, the loan includes a payment-in-kind component of 7.25% to 8.25%, which is scheduled to be paid only in 2026. PIK helps a company preserve immediate cash and allow delayed payments or payment through other ways, including in securities.
It tried to raise fresh capital in FY23, but due to poor market conditions ,it was forced to shelve its plans. Mint reported that Pharmeasy was trying to be profitable by reducing burn rate. The recent developments indicate its efforts are yielding results. A Manipal spokesperson declined to comment, and Pharmeasy founders were not available for comment.
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First Published:5 Jul 2023, 10:53 PM IST
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