PharmEasy FY22 loss widens to Rs 2,700 crore

API Holdings Ltd, the parent company of online pharmacy and health tech platform PharmEasy that recently withdrew its IPO (initial public offering) citing "market conditions and strategic considerations," reported a bigger loss for FY22 (2021-22) from a year earlier, as the company's employee benefit expenses surged more than five times during the year.

PharmEasy reported a net loss of Rs 3,992 crore for FY22 against Rs 641 crore in FY21 (2020-21), the company's filings with the Ministry of Corporate Affairs showed. However, excluding exceptional items or one-time loss on impairment of goodwill, the company reported a loss of Rs 2,731 crore during the year, the filings showed.

PharmEasy's employee benefit costs, which account for nearly a sixth of the company's expenses, surged to Rs 1,459 crore in FY22 from Rs 270 crore in FY21, the regulatory filings showed. PharmEasy also spent Rs 494 crore on advertising and promotional activities during the year, up from Rs 134 crore in FY21, according to the filings. The company's total expenses rose to Rs 8,492 crore in FY22 from Rs 2,981 crore in FY21.

PharmEasy's total revenue, however, more than doubled to Rs 5,729 crore in FY22, from Rs 2,335 crore a year earlier, thanks to a 2.5x rise in its operating income. For FY22, the company recorded operating revenue of Rs 5,781 crore. PharmEasy's other income, which includes interest income from fixed deposits and loans also jumped 2x to Rs 58 crore.

Founded in 2014 by Dharmil Sheth and Dhaval Shah in Mumbai, PharmEasy runs an online pharmacy platform and has attracted investments of more than $1.12 billion across 16 funding rounds over the years. The company counts Temasek, B Capital, Prosus, Steadview Capital, and Nandan Nilekani's Fundamentum Partnership among others as its backers.

PharmEasy was last valued at over $5 billion, when it raised funds in October 2021. The company filed draft papers with India's markets regulator in November 2021 and was seeking to get listed this year. The company also expanded into lab testing with the acquisition of a majority stake in Thyrocare for about $600 million in June last year.

But due to a low appetite for loss-making companies, PharmEasy shelved its IPO plans in August even after it god SEBI (Securities and Exchange Board of India) for its IPO. The company has also been planning to raise about $200-300 million, according to media reports, at a 15-25 percent lower valuation. In November, the company also raised an undisclosed amount in debt funding from EvolutionX Debt Capital.

Moneycontrol reported in October how the funding winter hit due to rising interest rates hitting the online pharmacy giant hard.