CCI Gives Nod To Ranjan Pai’s Investment in PharmEasy: Rs 3,500 crore Rights issue

PharmEasy, the online pharmacy company, has been in the news lately. The Competition Commission of India (CCI) has approved Rajan Pai’s investment of Rs. 1,300 crore in the company. This is great news for the company. Additionally, CCI has also cleared the investment from 360 ONE Group. We’ll have to wait and see how these investments will affect the company’s future.

Who is Rajan Pai?

Ranjan Pai, a medical doctor and chairman of the Manipal Group, leads an educational and healthcare empire. The Manipal group boasts 7 universities and 29 hospitals globally.

The Group was founded by Rajan’s grandfather in 1953, it stands as India’s first privately-owned medical school, located in Manipal, Karnataka. Notably, Pai maintains a 30% ownership stake in the Manipal Group hospital chain.

Where are the other investments of Rajan?

Rajan Pai is an active investor who is also referred to as a ‘white knight’ for troubled startups. He earned this title by investing in struggling startups like the ed-tech firm Byju’s and the online pharmacy PharmEasy.

In addition to these ventures, Pai has also invested in companies like Aakash, FirstCry, and BlueStone. According to sources, Pai has committed investments totaling $400 million thus far.

While Pai has plans for future investments, he hasn’t confirmed anything yet. All his investments are managed through his family office, Claypond Capital.

Who is the largest shareholder of PharmEasy?

Following Rajan Pai’s recent investment, he has emerged as the largest shareholder in PharmEasy. His estimated stake is now 12% in the company, and he is set to join their board soon.

There were speculations that Pai is expected to secure three seats on the board of API Holdings, due to his significant investment in the online pharmacy, though there is no confirmation in this regard. This investment has the potential to be a milestone in PharmEasy’s success.

PharmEasy initially planned to raise Rs 2,400 crore in funds, but why did it increase later?

Initially, the online pharmacy company planned to raise Rs 2,400 crore through a rights issue but later increased it to Rs 3,500 crore.

The primary aim behind this raise was to clear the debt owed to Goldman Sachs, totaling $300 million. PharmEasy priced the rights issue at a 90% discount to its peak valuation of $5.6 billion in 2021 to achieve this. 

Despite this discount, the issue was oversubscribed, raising Rs 3,950 crore. However, PharmEasy politely rejected other investment offers. Out of the total investment of Rs 3,500 crore, Rajan Pai contributed Rs 1,300 crore, while existing shareholders contributed the remaining Rs 2,200 crore.

Facing recent backlash from the public

PharmEasy has faced significant challenges in the past, which have garnered negative attention. The company’s history includes mass layoffs that received harsh criticism from the public. These layoffs were implemented to reduce cash burn and pave the way for profitability.

Furthermore, PharmEasy has also faced criticism for valuation markdowns and funding difficulties. These issues have contributed to a negative perception of the company among the public.

Are PharmEasy’s Shares Traded on the Stock Exchange?

The online pharmacy company had initially planned to launch its IPO in the stock market during FY 21. There was considerable excitement among investors for PharmEasy shares.

However, the company later withdrew the IPO without providing clear reasons. Subsequently, the parent company, API Holdings, cited market conditions and strategic considerations for this decision.

The sudden withdrawal of the IPO hurt the company and affected the value of PharmEasy’s unlisted shares. Currently, the unlisted shares of PharmEasy are trading at Rs. 10 each. Consequently, the company weighs rights issues as an alternative to raise funds. As a result, there is uncertainty regarding  PharmEasy shares price in NSE and whether the company will proceed with its IPO in the future.

Where is the future of PharmEasy?

With Rajan Pai’s investment and his newfound status as the largest shareholder and board member of PharmEasy, the online pharmacy could expect positive changes in future. Rajan’s involvement suggests that he likely has strategic plans to enhance the company’s value making it a more attractive investment opportunity.

Investors cannot trade PharmEasy shares on the stock market. However, they can invest in PharmEasy’s unlisted shares to through Stockify and gain good profits. We are a growing stock trading platform for unlisted shares. 

Table of Contents

The online pharmacy has received clearance from the CCI for its recent investment. Rajan Pai, who invested a good amount in the company, has become the largest shareholder of PharmEasy. He has also become a board member of the company with an estimated 12% stake.


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