PharmEasy parent API holdings to raise Rs 1,700 crore via NCDs to repay debt

API Holdings, the parent company of PharmEasy, is set to raise Rs 1,700 crore ($193 million) through redeemable non-convertible debentures (NCDs), pledging the shares of its listed diagnostics subsidiary Thyrocare. 

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According to exchange filings, the fresh capital will be used to repay earlier debt obligations.

The company had previously issued NCDs with a total redemption value of Rs 1,820 crore, of which Rs 1,545.4 crore remained outstanding. Those instruments were secured by pledging the entire 71.06% stake held by Docon Technologies, a PharmEasy group entity, in Thyrocare.

Following the repayment, Docon will release those shares and pledge up to 61% for the new issuance.

The latest debt round was led by 360 One, which contributed Rs 1,231 crore, with additional participation from Micro Labs Limited (Rs 210 crore), MVS Ventures (Rs 78 crore), Bennett Coleman (Rs 50 crore), and Alkram Ventures (Rs 42 crore). Eight other investors, including Kyrush Investments, Medley Pharmaceuticals, and Mahalaxmi Trust, subscribed to the remaining allotment. In total, 1,700 debentures were issued at Rs 10 lakh each, as per regulatory filings.

This marks PharmEasy’s third significant debt raise in four years, underscoring its reliance on high-cost borrowing to manage earlier loans.

The fresh infusion is aimed at completing repayment of a Goldman Sachs facility of Rs 2,700 crore, raised in May 2022 to refinance the Rs 2,200 crore Kotak Mahindra Bank loan taken for acquiring Thyrocare in 2021. That Goldman Sachs loan carried restrictive covenants on spending, which were breached in mid-2023, though PharmEasy continued to meet repayment schedules.

The funding comes against a backdrop of leadership churn and persistent pressure on profitability. In August, co-founder Siddharth Shah stepped down as PharmEasy’s chief executive officer, with Thyrocare’s MD and CEO Rahul Guha assuming the role.

Shah remains director and vice chairman at API Holdings, while other co-founders, Dharmil Sheth, Dhaval Shah, and Hardik Dedhia, exited executive roles earlier this year to launch a new venture in architecture and design. The company is now effectively steered by institutional investors, including Ranjan Pai’s family office, Prosus, TPG, and Temasek.

Financially, API Holdings narrowed its consolidated net loss by 40% to Rs 1,516.8 crore in FY25, compared with Rs 2,531 crore a year earlier, though operating revenue remained largely flat at Rs 5,872.1 crore.

Thyrocare, acquired for Rs 4,546 crore in 2021, reported stronger growth: its FY25 consolidated net profit rose 30.6% to Rs 90.8 crore on revenue of Rs 687.4 crore, up 20.2% year-on-year.