PharmEasy's Rs 3,500 Crore Rights Issue Oversubscribed, Says Co-Founder

PharmEasy parent API Holdings Pvt.'s Rs 3,500 crore rights issue, which happened at a 90% drop in valuation, is oversubscribed, according to Co-Founder Dhaval Shah.

"We raised Rs 3,500 crore, and there was more demand, which we had to politely reject. Every single shareholder stood up and supported us, believed in our vision, and saw value in what the team at API is building," Shah wrote on LinkedIn.

In November 2022, the startup had aimed for profitability by April 2023, he said. "Not for a month, not for a quarter, but for all months of H1 put together (April to September 2023), we clocked a cumulative Rs 60 crore of Ebitda at API."

While Shah didn't comment on the valuation, BQ Prime had earlier reported that API Holdings, also the parent company of Thyrocare Technologies Ltd., Docon Technologies Pvt., and other platforms, is set to undertake a downround, which is when a startup raises funds at a lower valuation than its previous round.

The rights issue saw the e-pharmacy company's shares valued at Rs 5 apiece, giving it a valuation of around $500 million, down from the $5.6 billion valuation it once commanded.

The startup's downturn was among the first for a prominent Indian unicorn, resulting in value erosion for its investors, which include Orios Venture Partners, B Capital Group, Eight Road Ventures, Bessemer Capital, Temasek Holdings Pvt. and TPG Inc.

The proceeds from the Rs 3,500 crore fundraise will now help it service debt that it raised from Goldman Sachs last year.

Queries sent to PharmEasy's co-founders and investor, Ranjan Pai, who likely participated in the rights issue, were not answered at the time of publishing this report.