Manipal Group offers to inject Rs 1,000 cr in PharmEasy owner API Holdings: Report

Manipal Group has offered to invest approximately Rs 1,000 crore for an 18 per cent stake in online pharmacy major PharmEasy owner API Holdings for the latter to repay its debt, said a report on Wednesday. API Holdings, which has been engaged in fundraising discussions with potential investors to repay its debt, had pledged Thyrocare shares as collateral for the debt, reported Moneycontrol.  

It is important to note that API Holdings has to repay a debt of Rs 2,500 crore. Previously, the company had pledged the shares of its subsidiary Thyrocare to Goldman Sachs as collateral for this debt. In June 2021, API Holdings acquired 66 per cent stake in Thyrocare for Rs 4,546 crore.

As part of this potential deal, Manipal Group may also secure a board seat at API Holdings, according to the report. Besides, other existing investors are expected to pump in approximately Rs 1,500 crore in a funding round led by the Manipal Group. 

With this, the total valuation of API Holdings is expected to touch Rs 6,000 crore. This would also make Manipal Group the single largest shareholder in API Holdings.

PharmEasy, which is India's largest online pharmacy, provides a range of services spanning digital tools and information on wellness, teleconsultations, diagnostic and radiology tests and treatment deliveries, as per the draft prospectus it filed in November with the Sebi. The company has a string base of investors, such as Prosus, Temasek, B Capital, Tiger Global, Orios, Kotak PE, among others.

Earlier, PharmEasy told its board and investors that it plans to raise around Rs 2,400 crore through a rights issue at a 90 per cent lower stock price to help repay its loan from Goldman Sachs, a report in ETtech said. 

Existing shareholders TPG and Temasek are leading the rights issue, the report said. Ranjan Pai, chairman of the Manipal group, is expected to join the company board. Pai of Manipal Hospitals is likely to invest in the rights issue as well. API Holdings will issue new stock at Rs 5 per share in its rights issue. 

In April 2023, Temasek said it will take majority control in Manipal Health Enterprises following the acquisition of an additional 41 per cent stake in the hospital chain.

According to a joint statement issued by the two companies, after the transaction, Manipal Group will hold about 30 per cent in the hospital chain. TPG will hold an 11 oer cent stake via its new Asia fund, TPG Asia VIII. 

PharmEasy, which is now valued at $500-600 million, withdrew its IPO plans in 2022 after startup stocks started tumbling on bourses citing market conditions and strategic considerations. 

In April, it was reported the company is planning to go profitable by bringing down its monthly burn rate. 

The company reduced its monthly operational loss from Rs 86 crore in March 2022 to approximately Rs 5.6 crore in March 2023.

The company reported consolidated net sales of Rs 5,728.8 crore in FY22, according to its regulatory filings with the Registrar of Companies. The losses in FY22 amounted to Rs 3,992.4 crore in FY22. However, the operational loss stood at around Rs 850 crore in FY22.

 

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