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  3. Pharmeasy’s Valuation Slashed By 90% By Investor Neuberger Berman

Pharmeasy’s Valuation Slashed By 90% By Investor Neuberger Berman

7 Nov 2023

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Key Takeaways

  • IPO Cancellation: PharmEasy planned to go public and pay off the Goldman Sachs loan with approximately Rs. 6,250 crore due to unfavorable market conditions canceling its IPO plans.

  • Loan Covenant: PharmEasy breached its loan covenant by failing to raise Rs. 1,000 crore equity. This allowed Goldman Sachs to take over PharmEasy.

  • Impact on Startup Ecosystem: Valuation cuts could put downward pressure on the valuations of hundreds of smaller startups and companies. It might be the first in a series of downrounds looming for India’s many unicorn startups.

  • IPO Cancellation: PharmEasy planned to go public and pay off the Goldman Sachs loan with approximately Rs. 6,250 crore due to unfavorable market conditions canceling its IPO plans.

  • Loan Covenant: PharmEasy breached its loan covenant by failing to raise Rs. 1,000 crore equity. This allowed Goldman Sachs to take over PharmEasy.

  • Impact on Startup Ecosystem: Valuation cuts could put downward pressure on the valuations of hundreds of smaller startups and companies. It might be the first in a series of downrounds looming for India’s many unicorn startups.

pharmeasy unlisted shares

API Holdings (Pharmeasy)

-8.09%

Expert Analysis

Pharmeasy’s Valuation Slashed By 90% By Investor Neuberger Berman.

Expert Analysis:

  • The valuation was reduced by 90%, and shares Neuberger Berman acquired for $8.87 million in October 2021 are now valued at just $823,432.

  • In July 2023 was seeking emergency funds at a valuation of $500-600 million.

  • Over eight years, PharmEasy raised $1.6 billion but eroded nearly Rs. 8,000 crore.

  • PharmEasy acquired Thyrocare for Rs. 4,500 crore, financed by a 5-year loan from Kotak Mahindra Bank. Later, it took a Rs. 2,280 crore loan from Goldman Sachs to repay the Kotak loan.

Publisher:OfficeChai