CCI Clears 360 ONE, Ranjan Pai’s Stake Acquisition In PharmEasy

SUMMARY

PharmEasy’s existing investors 360 ONE and Ranjan Pai’s Claypond Capital have obtained the CCI’s nod to jointly purchase additional stake in the healthtech unicorn

Following PharmEasy’s $216 Mn funding round last year, Ranjan Pai held an estimated 12% stake in the digital pharmacy

This comes at a time when PharmEasy is grappling with funding crunch, valuation markdowns and uncertainty over its IPO

The Competition Commission of India (CCI) has approved the proposals of 360 ONE and Claypond Capital to jointly purchase stakes in healthtech unicorn PharmEasy parent API Holdings.

However, there is no clarity on the deal terms, including size and amount.

Under the proposed transaction, 360 ONE aims to acquire certain class B compulsorily convertible preference shares (CCPS B) of API Holdings from existing shareholder, MEMG Family Office LLP, the regulator said in its order yesterday.

The competition watchdog has also greenlit the proposal of Claypond Capital, the family investment office of Manipal Group chairman Ranjan Pai, to acquire certain CCPS B of API Holdings from MEMG Family Office LLP.

It must be noted that following PharmEasy’s $216 Mn funding round last year, Ranjan Pai held an estimated 12% stake in the company.

PharmEasy Caught In Financial Turmoil

Founded in 2015 by Dharmil Sheth and Dhaval Shah, PharmEasy started its journey as an online medicine delivery startup. In 2020, the startup merged with pharmaceutical distribution company Ascent Health to form API Holdings, with Harsh Parekh, Siddharth Shah, and Hardik Dedhia joining as cofounders.

Amid a funding crunch, PharmEasy borrowed $300 Mn from Goldman Sachs in 2023 but struggled to repay the loan. In 2021, it also took a debt for a majority stake acquisition in Thyrocare for $600 Mn.

While the online pharmacy major managed to secure fresh capital last year, it came at a steep discount. In April 2024, PharmEasy raised $216 Mn from Ranjan Pai’s Manipal Education and Medical Group and other existing investors such as Prosus, Temasek, among others. The round valued the company at around $700 Mn, a 90% markdown from its all-time-high price tag of $5.6 Bn.

The valuation cut didn’t stop there. Reports surfaced last year that Janus Henderon, which is an investor in PharmEasy, had further slashed the valuation of the company to $458 Mn.

The company’s financial challenges emerged after it pulled back its public listing plans after filing a draft red herring prospectus (DRHP) for INR 6,250 Cr initial public offering (IPO).

Earlier this year, 4 out of 5 cofounders of PharmEasy stepped down from their executive roles. This comes amid reports that PharmEasy is planning to float its IPO this year.

PharmEasy’s consolidated net loss halved to INR 2,531.1 Cr in the financial year 2023-24 (FY24) from INR 5,202.5 Cr in FY23. However, its operating revenue also declined 14.75% to INR 5,664.2 Cr in FY24 from INR 6,643.9 Cr in FY23.