KuberGrow Team PharmEasy, the online pharmacy giant, is preparing for a fresh IPO attempt this year, two years after withdrawing its initial plans. According to The Economic Times, the company will present its IPO strategy to its board next month, which might include a reverse merger with its publicly listed subsidiary, Thyrocare.
The company aims to leverage its better cash flow and a restructured business model to regain investor trust. A key focus of the strategy is reducing cash burn, which will be discussed in the February board meeting.
In leadership changes, three co-founders—Dhaval Shah, Dharmil Sheth, and Hardik Dedhia—stepped back from daily operations last year but remain on the boards of API Holdings and Thyrocare. They are reportedly starting a new venture, with PharmEasy CEO Siddharth Shah expected to invest.
PharmEasy’s IPO plans align with a broader trend among Indian startups like Boat, Ola Consumer, and Oyo, which are also preparing to go public after delays.
Financial Update:
In FY24, PharmEasy’s revenue dropped by 14.7% to ₹5,664 crore, compared to ₹6,644 crore in FY23. However, it managed to cut its losses by half, reducing its net loss to ₹2,533 crore from ₹5,212 crore, mainly by slashing goodwill impairment charges and employee expenses. Medicine sales brought in ₹5,008 crore, while lab tests and other services added ₹652 crore.
The company has also focused on reducing costs, with total expenses falling from ₹8,974 crore in FY23 to ₹7,255 crore in FY24. Employee costs dropped significantly from ₹1,283 crore to ₹699 crore due to cost-cutting measures.
Looking Ahead:
After raising ₹3,500 crore through a recapitalization in 2023, PharmEasy used the funds for debt servicing and restructuring. The company is now focused on sustainable growth and cutting cash burn, though competition remains fierce with rivals like Tata-owned 1mg, Apollo 24×7, and Flipkart Minutes expanding their presence.
Despite challenges, PharmEasy’s new strategy and financial improvements mark a crucial step toward re-entering the public markets.
