A Reduction In Valuation Witnessed By PharmEasy Shares: What It Signifies?

API Holding Ltd, popularly known as PharmEasy, witnessed a 50% drop in its market valuation. It significantly impacted PharmEasy unlisted share price, which went down from Rs 50 per share to Rs 24.6 in the last five months. Global Asset Management Group Janus Henderson recently marked down PharmEasy’s valuation by half, and the valuation is now estimated at $2.8 billion as of the recent figures released by the company. 

As a result, the overall valuation of the PharmEasy unlisted shares also went down in the grey market. This news raises a big question about the company’s plans for the IPO, which might launch next year. This post will discuss the impact of the downgraded valuation on API Holding share price and performance.

Key Details Of The Reduction In Valuation Of API Holding Ltd (PharmEasy)

The total valuation of PharmEasy has been slashed by the global investor Janus Hunderson by 50 percent. According to the sources, API Holding Ltd’s valuation has dropped from $5.6 billion to $2.8 billion. Before that, a US-based investor Neuberger Berman also reduced the valuation of PharmEasy by 22 per cent. For your information, Janes Hunderson acquired stakes in PharmEasy and currently manages the company’s assets. It is not the only company that saw the reduction in valuation; other unicorns of India like Byju’s, Swiggy, Ola, and Pin Labs also witnessed the reduction in market valuation by their investors.

In 2021, PharmEasy raised around $140 million through the secondary sale of shares which took its valuation to $5.6 Billion. Moreover, API Holding Ltd reported a net loss of Rs 3,992 crore in FY22, while its net loss for FY21 was Rs 641 crore. As a result, API Holding share price was reduced by almost twice in five months. One of the biggest reasons behind it is the company’s weak financials. Moreover, PharmEasy was also hit by the economic slowdown, which forced it to cut operational costs and reduce its workforce during the layoff round.

How Does Change In Valuation Impact PharmEasy Unlisted Shares?

It is crucial to understand the possible impact of the change in valuation on PharmEasy unlisted share price and performance. Whenever the valuation of any company drops, it directly affects the performance of its shares. As the valuation of API Holding Ltd has dropped by almost 50 per cent, it largely affected API Holdings share price in the Pre-IPO market, which went down from once the news got public. 

Let’s see the impact of the change in PharmEasy’s market valuation on its unlisted shares:

High Fluctuation in Price

One of the significant impacts of the market valuation drop can be seen in PharmEasy share price, which fluctuated in the last few months. 

As per the recent market data, PharmEasy unlisted share price dropped from Rs 50 per share to Rs 24.6 per share in the last few months. However, various financial experts believe that PharmEasy share price might increase in the coming months. API Holdings unlisted share price today is Rs 22.0 per share.

Lower Face Value

Apart from the API holding a grey market price, its unlisted shares’ fair value also reduced. Since the face value of the shares depends on the company’s performance and current unlisted share price, its face value dipped by almost 30%, which is quite higher. However, other factors like operating revenue, profit & loss also reduced on a large scale.  

Equity Per Ratio

Equity per ratio is another factor that impacted the reduction of PharmEasy valuation, and it remained negative throughout the last financial year. Investors seeking high equity per share on the PharmEasy unlisted shares might have to wait longer. There are negative effects of the valuation drop on the equity per ratio of API Holdings, which went down from (-2) to (-70) in the last financial year.

Future Outlook Of PharmEasy Unlisted Shares

There is no doubt that the change in valuation negatively impacted the PharmEasy unlisted shares. However, there is good news for investors seeking PharmEasy Pre-IPO shares as a long-term investment. The company reported a positive EBITDA since its inception, with a net revenue of Rs 600 crore in April. 

In addition, PharmEasy’s officials also confirmed that the company is planning to have a positive cash flow by the end of September this year. PharmEasy is looking to cross-sell more services on its platform as a part of its business growth strategy. So, investing in PharmEasy unlisted shares is beneficial for investors. 

To start your investment, you can use Stockify, India’s trusted platform, to buy or sell unlisted shares. Using this platform, you can check current unlisted share prices, EBITDA, market valuation, equity per ratio, and more. 

The experienced financial expert team at Stockify provides the right guidance in diversifying your investment portfolio. For getting long-term financial benefits, invest in PharmEasy unlisted shares.