PharmEasy is an Indian e-pharmacy company established in 2015 by Dharmil Sheth and Dhaval Shah in Mumbai; the company has since grown to become the largest in India after acquiring Medlife and Thyrocare in 2021. It provides services in the field of medicine delivery, diagnostics, and telehealth and is already present in more than 1,000 cities and employs more than 4,700 people as of 2024
Having been valued at 5.6 billion US dollars in October 2021, during its funding round in September 2023, PharmEasy lost more than 90 percent of its value and came to be worth about 710800 million US dollars in its aggressive debt-driven growth coupled with rights issues. Even major shareholders such as Manipal Group, Prosus, Temasek, and others provided 3,500 reinforcements in the form of currency to clear debts and stabilize operations following the company defaulting on the terms of credit regarding Goldman Sachs
Its FY24 financial results indicate a dip in revenue by approximately 14.7% or 380 basis points, 6644 cr in FY23 to 5664 cr, mainly resulting because of strategic de-emphasis on low-margin/low growth categories. Nevertheless, the losses were cut down in half, i.e., by 5,212cr to 2,533cr, due to optimisation of costs, a low impairment of goodwill, and an operation squeeze. The EBITDA losses also reduced greatly with the effect of enhancement of the unit economics and a shift towards green-friendliness.
The board has already approved a strategy that is scheduled to be held in February 2025 with a reverse merger, funded by listed Thyrocare, as an option to offer PharmEasy a boost in the IPO. The company is planning to restart its IPO plans in the next few months, provided that there would be better results and financial restructuring of the company. It is believed that unlisted shares are already sold on greycash markets at between 8 and 11 (as of July 2019) per share in the secondary auction market, and larger blocks of stock and frequent purchasers have been able to negotiate even lower prices (~8.50 or below).
The first major strength includes the fact that PharmEasy is the market leader in the digital healthcare category in India, has a massive pan-India presence and has achieved diagnostic services through the merger with Thyrocare. It helped it buy breathing space to restructure as it switched to rights issue financing as opposed to dilutive acquisitions. Expectation based on better EBITDA and new capital support comes out in the Reddit comments, especially the Manipal investment at ~8 per share
Nevertheless, there are strong threats. It is still working at a net loss and has a large amount of debt (probably around 4100 cr in total debt as of FY24), and declining revenue despite increasing scale. There is an increased level of competition by the players such as Tata 1mg, Apollo 24×7 and Flipkart minutes. The delay or the fact that IPO listing may not be definite introduces the illiquidity risk in the unlisted market
Investors are advised to consider the liquidity limits, transparency and unclear valuation in unlisted equity when investing capital
Nevertheless, it should be noted that PharmEasy features a possible turnaround story despite the turbulence. Its 2024 upgrades and management recapitalisation, alongside new IPO plan of action provide an asymmetric upside play should operational performance improve further and its plans to go to market come through. Unlisted PharmEasy equity shares can represent an interesting and speculative opportunity to other cautious investors with a higher risk threshold and a longer time horizon in India and the health‑tech sector, where the latter is expected to grow.
