Unraveling the Enigma: Pristyn Care's Recent Funding Raises Concerns Over Financial Health.

In a surprising move that has raised eyebrows in the startup ecosystem, GHV Advanced Healthcare, popularly known as Pristyn Care, secured a substantial funding of 80 crores from HDFC Bank in June 2023. This funding, however, has ignited concerns among industry experts and market observers, given the startup's lack of significant revenue and an unconventional approach to financing.

Pristyn Care, a unicorn in its own right, has become a prominent player in the healthtech space, leveraging an asset-light model that relies heavily on partnering with established hospitals rather than owning infrastructure. While this approach has allowed them to scale rapidly without the burden of capital-intensive investments, the recent funding from HDFC Bank has brought to light some puzzling aspects of the company's financial health.

One of the primary concerns revolves around the apparent lack of substantial revenue in Pristyn Care's previous financial filings. Unlike many startups that rely on multiple rounds of equity funding, Pristyn Care opted for a bank loan from HDFC Bank, a move that is considered atypical in the startup landscape. Bank loans necessitate repayment irrespective of the business outcome, a stark contrast to equity funding where investors share the risks.

The market has observed an interesting coincidence that adds another layer of skepticism to this funding. There has been a surge in inflated demand notices sent to Pristyn Care's partner hospitals, and in some cases, even ex-partners. These inflated figures, reportedly in the range of 10 to 15 times the actual amounts, have raised suspicions about the integrity of Pristyn Care's financial reporting.

The theory gaining traction among industry insiders is that Pristyn Care may have deliberately sent these inflated notices to artificially boost their receivables, subsequently showcasing a healthier financial position on their projected balance sheet. This potential manipulation of financial data could have played a pivotal role in securing the bank loan from HDFC, raising questions about the due diligence conducted by the bank.

The question now arises: who within HDFC Bank undertook the due diligence on Pristyn Care's financials, and were they aware of the possible inflation in demand notices? The lack of transparency in this process has fueled concerns that this funding might be a case of misplaced trust, potentially leading to a Non-Performing Asset (NPA) situation for HDFC Bank.

Investors, both existing and potential, are closely monitoring the unfolding developments surrounding Pristyn Care. The startup, once a beacon in the healthtech sector, now finds itself under the scrutiny of financial experts and regulatory authorities. The incident serves as a cautionary tale for both startups and investors, highlighting the importance of thorough due diligence and transparency in financial dealings within the vibrant but often unpredictable world of startups. As the situation continues to unravel, the consequences of this funding decision will undoubtedly resonate across the startup ecosystem, reshaping perceptions and prompting a reevaluation of risk assessment practices in the ever-evolving landscape of healthtech investments.