PharmEasy Posts Rs 5,200 Crore Loss In FY23

API Holdings Pvt., the owner of PharmEasy, reported an expansion of losses, bogged by exceptional items alongside minimal growth in revenue, as the e-pharmacy aims to shore up its bottom line.

PharmEasy's consolidated revenue from operations came in at Rs 6,644 crore in FY23, up roughly 16% from Rs 5,728.8 crore in the previous fiscal. It also posted a loss of Rs 5,211.7 crore, up from Rs 3,992.4 crore in FY22, according to financial statements on the company's website.

The company booked exceptional items, which included impairment of goodwill and investments, worth Rs 2,922 crore in FY23, which caused losses to expand. It had booked losses of Rs 1,261 crore in FY22 under the same segment.

Excluding the one-time non-cash loss, its bottom line came in at a loss of Rs 2,274.5 crore, a slight improvement from Rs 2,709 crore in FY22.

In July last year, the company announced plans to undertake a Rs 3,500-crore rights issue, which was a downround, which is when a startup raises funds at a lower valuation than its previous round.

The rights issue saw the company's shares valued at Rs 5 apiece, giving it a valuation of around $500 million, down 90% from the $5.6 billion valuation it once commanded. It had issued shares worth north of Rs 50 apiece then, according to people from the industry who are familiar with the matter.

That rights issue was oversubscribed by October, co-founder Dhaval Shah had announced then. In its financial statements, however, PharmEasy said it has received subscriptions of approximately Rs 1,867 crore and the rights issue remains open as of Dec. 5.

There had been a breach of certain covenants relating to the non-convertible debentures issued by the group in FY23, as PharmEasy mentioned in the statements.

For the next year, the company plans to reduce certain recurring and non-recurring costs like employee benefits, marketing and legal and professional fees. It also plans to raise funds through the rights issue of equity shares subsequent to the balance sheet date.

Restructuring of terms for non-convertible debentures (including waiver of breach of covenants) and binding term sheets entered by the company with certain existing and new investors are also in the pipeline.

Based on the above, the group said it is "confident of its ability" to meet the fund requirements and to continue its business as a going concern.

In May last year, PharmEasy's valuation was slashed by 50% to $2.8 billion by U.S.-based investor Janus Henderson from its $5.6 billion worth, per its last funding round of $350 million in October 2021. Another U.S. investor, Neuberger Berman, cut PharmEasy's valuation by 21% to $4.4 billion as of February 2023.