API Holdings, the parent of Pharmeasy, plans to approach the Manipal Group only to cover any shortfall that may occur if all shareholders do not participate in its rights issue, said people with direct knowledge of the matter. The online pharmacy plans to raise up to Rs 3,000 crore to repay debt.
The Manipal Group's family office had made a binding offer to invest up to Rs 1,300 crore in the online pharmacy, the people said. The API Holdings board is said to have approved the offer but only to cover the remaining amount if not all shareholders participate in the rights issue.
It took this decision after a section of investors expressed reservations on the sale of shares to the Manipal Group at a low valuation in a July 17 meeting with the management.
The post-money valuation of API Holdings is expected to be around Rs 6,000-7,000 crore ($730-853 million), a massive markdown from its last fundraise, which valued it at $2.8 billion.
API Holdings and the Manipal Group did not respond to queries seeking comment.
API Holdings' valuation had peaked at $5.6 billion in 2021. Since then, the overall valuation drop in the digital commerce space along with funding winter and API’s financial troubles have driven down the value of its shares.
The company needs an immediate cash infusion of around Rs 2,500 crore to repay debt to Goldman Sachs. The company has pledged Thyrocare shares to the lender as collateral. In the event of a breach of debt covenants, Goldman can invoke the pledged shares and Pharmeasy is left with few options, one of the people cited earlier said.
Pharmeasy’s top investors include Prosus Ventures, Temasek, TPG Growth, and CDPQ which together hold close to 35 percent of its shares.
As part of the fund-raising discussion, the promoters’ shareholding will get diluted to around 4.5-5 percent from close to 10 percent now.
“Founders can be incentivised with ESOPs (employee stock options) based on performance metrices as part of the deal,” a person aware of the development said.
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