API Holdings, the parent company of PharmEasy, Thyrocare Technologies Ltd., and Docon Technologies Pvt., has experienced a significant drop in valuation following the successful oversubscription of a ₹3,500 crore rights issue. The share price was set at ₹5 each, marking the company's valuation at $500 million, a stark contrast from its previous peak of $5.6 billion.
The company announced this downround on LinkedIn, highlighting a 90% drop in valuation. This move was primarily aimed at servicing debt owed to Goldman Sachs (NYSE:GS). Despite leading to value erosion for investors, prominent backers such as Orios Venture Partners, B Capital Group, Eight Road Ventures, Bessemer Capital, Temasek Holdings Pvt., TPG Inc., and Ranjan Pai supported the decision.
Despite the drastic drop in valuation, API Holdings remains optimistic about its financial prospects. The company expects to achieve profitability by April 2023, with an estimated cumulative EBITDA of ₹60 crore (INR100 crore = approx. USD12 million).
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