The fundraising will be done via a rights issue where the stock will be sold at a 90 per cent discount at Rs 5 per share
New Delhi, NFAPost: Online pharmacy firm PharmEasy is expected to raise Rs 2,400 crore through a rights issue at a 90 per cent discount to help pay back its loan from Goldman Sachs, The Economic Times (ET) reported. The company has informed its board and investors of the decision.
A rights issue is undertaken to allow shareholders to acquire additional shares of a company.
The report added that PharmEasy parent, API Holdings, will issue new stock at Rs 5 per share in its rights issue. At its peak, the company had raised funds at Rs 50 per share.
TPG and Temasek are in charge of the rights issue, and Ranjan Pai, chairman of the Manipal group, is expected to join the company’s board.
According to a separate report by Moneycontrol, Manipal Group will lead the round and invest nearly Rs 1,000 crore for an 18 per cent stake in the firm. It added that API Holdings has kept the shares of Thyrocare, another company it owns, as collateral for the debt.
PharmEasy has outstanding debt of around Rs 2,400 crore.
If the rights issue is successful, it will be one of the first major down rounds for a big internet firm through new financing. A person aware of the matter was quoted in the ET report as saying that the rights issue will most likely take place at a valuation of $500-600 million.
It was last valued at $5.6 billion in 2021.
The report also said that the price of the share had to be adjusted as it was freely available in the grey market for Rs 20.
According to earlier reports, PharmEasy had violated a key loan term imposed by Goldman Sachs by failing to close a Rs 1,000 crore funding round.
“Following the convent breach, the board and shareholders demanded that the loan be repaid to Goldman Sachs,” said a person familiar with the developments told ET.
The company could opt for an outright distress sale or a rights issue, which would allow current investors to buy more at a lower cost.
PharmEasy withdrew its plans to launch an initial public offer (IPO) last year. At one point, its share price was as high as Rs 130. But now, the markets have turned sour on new-age startup stocks.
ET report also said that while crossover funds and public market investors have reduced the value of their stakes in Indian tech startups, a down round via fresh fundraising has yet to hit the domestic ecosystem.
