PharmEasy value crash may not hit Velumani’s stake

economictimes.indiatimes.com:

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, people aware of the investment terms said. This will ensure he is allotted new shares to compensate for the massive erosion in the current value of his holding in the company, they added, as PharmEasy looks to raise fresh capital through a rights issue at a 90% discount to its peak valuation, as reported by ET first on Wednesday.

PharmEasy is faced with a steep cut in its valuation, with the new funding round pegging its shares at Rs 5 each compared to the Rs 50 per share that it secured in 2021. The huge fall in value has triggered questions about the fate of Velumani’s purchase of a 5% stake in the firm in 2021 when it was valued at $4 billion.

“This was one of the conditions on which Velumani made the investment,” said one of the persons cited above. “So if the value of the company goes down significantly, he gets to secure (for the loss) due to the erosion.

Besides the institutional investors, there would be few large individual investors to have this protection.” Velumani declined to comment while a spokesperson for PharmEasy didn’t immediately respond to ET’s request for comments. The new financing is akin to a recapitalisation of the company, as investors have secured control of the beleaguered e-pharmacy.