Investor Reduces PharmEasy's Valuation to $456 Million

Nitin Konde, Varun Bhardwaj

Dec 28, 2024 — 2 min read

PharmEasy's Valuation Cut to $456 Million by Investor

Online pharmacy PharmEasy's worth has fallen to about $456 million, a sharp 92% decrease from its previous peak of $5.6 billion. Additionally, the company's worth has dropped by 18.57% since its latest fundraising in April, when it was valued at about $560 million. A renowned media house was the first to disclose this huge decline, quoting Janus Henderson, an investor in PharmEasy, who stated that his 12.9 million shares are now worth just over $0.76 million, which is less than the $9.4 million he originally invested.

The move follows the company's earlier this year acquisition of more than $216 million in new funding. The company was valued at about $560 million at the time of the financing round, which was undertaken at a 90% valuation drop from its peak. Furthermore, PharmEasy's present valuation appears to be much lower than the $600 million it paid to purchase the diagnostic lab chain Thyrocare in 2021.

The Root Cause of the Decline

After delaying a $843 million initial public offering (IPO) that was planned for 2021, PharmEasy's financial issues became apparent. After that, the business was under more and more pressure to control its debts, including a $300 million loan from Goldman Sachs that was challenging to pay back in a tighter market. PharmEasy responded to these difficulties by launching a rights offering and generating $417 million to pay off its debt and ease its financial strain. Notably, this rights offering gave current shareholders the opportunity to buy shares at a reduced price, which may dilute ownership for non-participants.

In 2023, Neuberger Berman was another investor to lower the value of their PharmEasy assets, bringing the company's valuation down by 21% to $4.4 billion. PharmEasy was founded in 2015 by Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah, and Hardik Dedhia. Its main online platform distributes medications, and its subsidiaries provide diagnostic services.

Recent Developments in PharmEasy

Due to a decrease in operating expenses and unusual items, the epharma company's consolidated net loss in the fiscal year 2023–24 (FY24) was cut in half, reaching INR 2,531.1 Cr. In FY23, the company's net loss was INR 5,202.5 Cr, a 51.35% decrease. Its operating revenue did, however, also decline. From INR 6,643.9 Cr in FY23 to INR 5,664.2 Cr in FY24, PharmEasy's operating revenue decreased by 14.75%. This is the main reason why PharmEasy has recently seen a number of changes.

On August 16, 2024, ArisInfra Solutions, supported by the CEO of PharmEasy, submitted draft papers for an INR 600 Cr IPO, demonstrating continued efforts to generate money in the healthcare industry. Thyrocare, which is owned by PharmEasy, also revealed ambitions to extend its operations in northern India by purchasing Polo Labs' pathology testing division.