People familiar with the matter said Goldman Sachs is in advanced talks to invest around $350 million (Rs 2,700 crore) in API Holdings Ltd, the parent company of online pharmacy PharmEasy, in a structured loan transaction.
According to the persons, the debt will have a 14-15 percent interest rate and a pre-agreed equity upside, or a premium to the rate based on a prospective increase in the company’s worth. The funds will primarily be used to repay loans taken out to fund the company’s acquisition of diagnostics chain Thyrocare last year.
At press time Tuesday, Goldman Sachs had declined to comment, and an email sent to API Holdings had gone unanswered.After concluding the deal with the US financial services firm, the company may raise another $200 million.
PharmEasy, India’s largest online pharmacy, planned to raise Rs6,250 crore in an initial public offering of shares, with Rs1,929 crore going toward debt repayment. By August 2022, a portion of the debt will be due. Due to the current market conditions, the IPO plans have been put on hold.
When a group of global firms committed $350 million in a pre-IPO round in October of last year, PharmEasy was valued at $5.6 billion. PharmEasy’s new investors include Singapore-based Amansa Capital, hedge fund ApaH Capital, OrbiMed, Steadview Capital, and Abu Dhabi’s sovereign wealth fund ADQ.
Prosus Ventures, TPG, and others launched a $350 million Series-E round of fundraising in April 2021, valuing PharmEasy at 1.5 billion dollars. The company’s value soared to $4 billion after it bought a 66 percent share in Thyrocare in June 2021.
With a 12 percent investment in the company, Prosus Ventures (formerly Naspers Ventures) is the largest shareholder. Temasek Holdings, based in Singapore, owns 11% of the company, while TPG Growth owns 6.6 percent and Evermed Holdings owns 6%. About 70 percent of the corporation is owned by 43 investors.
PharmEasy, a Mumbai-based startup founded by Dhaval Shah and Dharmil Sheth in 2015, claims to have 25 million registered consumers as of June 30, 2021. In fiscal year 2021, the company had 2.4 million transactional customers and completed 8.8 million orders, according to the corporation.
PharmEasy is responsible for half of the gross value of transactions in India’s online pharmacy market, compared to 1mg’s 16 percent and Netmeds’ 15 percent.
Customers have shifted from physical storefronts to online pharmacies in the aftermath of the Covid epidemic. As a result, more firms have entered the industry to take advantage of the potential. Flipkart just launched Health+, joining Amazon Pharmacy, Reliance Industries’ NetMeds, Tata Group’s 1mg, Mfine, and MeddyBuddy in the online pharmacy industry.
Tata and Reliance have lately entered the industry as a result of buyouts. Last year, Tata Digital bought 1mg, and in 2020, Reliance Retail will buy a majority interest in Chennai-based platform Netmeds.
According to the latest KPMG-Ficci report, the e-pharmacy market was valued at $345 million in 2021 and is expected to increase at a compound annual rate of 21.28 percent from 2021 to 2027. There is still a lot of room for Internet penetration in India.As a result, according to the report, e-pharmacies will continue to rise.
