After Haldiram, now the leading pharmaceutical company Cipla is going to sell its major stake, what is the reason? - Newztezz Online

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Wednesday, May 15, 2024

After Haldiram, now the leading pharmaceutical company Cipla is going to sell its major stake, what is the reason?

On one hand, while discussions were going on about the sale of Haldiram, now news of the sale of stake in the leading pharma company also started coming. Drug manufacturing company Cipla is planning to do a block deal today i.e. on Wednesday. Let us know to whom and how much stake the company is going to sell.

The news of sale of Haldiram has once again become a topic of discussion. Actually, till now the rumor of sale of Haldiram has surfaced many times, but for the first time officially 3 big foreign companies have bid to buy its entire business. The companies buying Haldiram include the world's largest equity investment company Blackstone, Abu Dhabi Investment Authority and Government of Singapore Investment Corporation.

While on one hand there were discussions going on about the sale of Haldiram, now the news of selling the stake of the leading pharma company also started coming. Actually, drug manufacturing company Cipla is planning to do a block deal today i.e. on Wednesday. In such a situation, the question arises that in whose hands will the command of this biggest and oldest company go and what will be its impact on the pharma sector. Could there be some impact on drug prices? Because it is believed that Cipla has provided such medicines at very low prices, which other companies have been selling at expensive prices.

How much stake can the company sell?

The country's leading pharma company can sell 2.53 percent stake in the company's promoter family and Okasa Pharma under the block deal. This will be a deal worth Rs 2,637 crore. According to media reports, the price at which the Cipla block deal is expected to be done is between Rs 1289.50-1357.35. It is the sole broker of Kotak Securities Block Deals. There is a lock-in period of 90 days for sellers after the block trade.

According to the information, this block deal can be in the range of Rs 1,289.5 to Rs 1,357.35 per share. This is at a discount of about 5% from Tuesday's closing price of Rs 1,358.20. According to Moneycontrol data, at the end of March 2024, promoters' stake in Cipla stood at 33.47%. At the same time, mutual funds have increased their stake from 16.66% to 16.83% in the January-March quarter. Apart from this, FII or FPI has also increased its stake from 25.73% to 25.82% in the same quarter.

This is the strategy

Along with its financial results, the pharmaceutical company also revealed its strategic intention to enter the weight loss sector in India. The company is trying to capitalize on the growing demand for solutions to combat obesity. While Cipla itself is working on an anti-obesity drug, it is also ready to sell American drugmaker Eli Lilly's weight loss drugs in the Indian market. It is noteworthy that Cipla has already partnered with Eli Lilly to sell and promote their diabetes medicines in the country.

This company has shown interest

According to ET, Torrent Pharma had shown interest in buying the other family stake in Cipla. According to the report, Ahmedabad-based Torrent has approached several PE funds, including Advent International, Bain Capital, Warburg Pincus and CVC Capital, for a minority stake in a consortium. The buyers will be revealed after the date of the block deal is announced on Wednesday.

How were the quarterly results?

Cipla Limited's profit increased by 78.7 percent to Rs 931.87 crore in the March quarter. Cipla said in a statement to the stock market that its profit in the year-ago period was Rs 521.51 crore. Operating income in the quarter stood at Rs 6,163.24 crore, compared to Rs 5,739.3 crore in the same period a year ago. Cipla's total expenses in the fourth quarter of the financial year 2023-24 stood at Rs 5,153.31 crore, while in the financial year 2022-23 it was Rs 4,946.14 crore.

Cipla's profit for the entire financial year 2023-24 was Rs 4,153.72 crore which was Rs 2,832.89 crore in the financial year 2022-23. During this period, the operating income of the company also increased to Rs 25,774.09 crore whereas a year ago it was Rs 22,753.12 crore.

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