The board notified its shareholders about increasing the authorised share capital to Rs 3,500 crore (about $423.72 million), divided into 3,000 crore equity shares of Re 1 each, and 500 crore preference shares of Re 1 each. A company increases its authorised share capital to pump in new money from investors.
The Mumbai-based company proposed the increase ahead of its rights issue, which was initiated in order to pay off its debt to Goldman Sachs after it breached loan covenants, ET reported on Wednesday. It had informed its board and investors that it plans to raise around Rs 2,400 crore ($291.5 million) through a rights issue at a 90% discount to its peak stock price.
API Holdings is planning to issue new stock at Rs 5 per share, according to documents seen by ET. API Holdings last raised funds at Rs 50 per share in 2021. The Mumbai-based company (which also houses Thyrocare) is expected to be valued at $500-600 million — down from the high of $5.6 billion two years ago.
If the rights issue goes through at the proposed pricing, it would be among the first major down rounds for a large internet firm. A down round is when a privately held firm raises funds at a valuation lower than its previous round.
On Friday, ET also reported that Arokiaswamy Velumani — the founder of diagnostic chain Thyrocare, which was acquired by PharmEasy in 2021 — had secured anti-dilution rights ahead of his investment of Rs 1,500 crore in the online pharmacy in 2021. The anti-dilution right will ensure Velumani is allotted new shares to compensate for the massive erosion in the value of his holding in the company.
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PharmEasy’s marquee shareholders include Temasek, TPG Growth, B Capital Group, Prosus Ventures and others. Started by Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah and Hardik Dedhia, PharmEasy had raised a total of $1.1 billion, including debt, in 2021.
