Mumbai:The share price of Torrent Pharmaceuticals Ltd rose about 20% to close at Rs185 on the Bombay Stock Exchange on Tuesday, on speculation that an Indian business conglomerate was in talks to buy a significant stake in the drug maker.
A Torrent spokesperson denied the sell-out talks but said: “There was an internal share transfer between two promoter entities.” The company, promoted by the Mehta family, is a Top 10 player in the Rs55,000 crore domestic pharma market.
It has an extensive marketing network and a wide range of generic and branded drug portfolio. Torrent also has a strong R&D (research and development) outfit, which runs at least half a dozen promising discovery projects, both in-house and in collaboration with global companies.
On Tuesday, Torrent’s counter showed a block deal of 2.5 million shares between U.N. Mehta HUF (Hindu undivided familiy) and Torrent Pvt. Ltd, its two leading promoter stakeholders. The promoters hold 74% stake in Torrent Pharma.
A person from the industry, who didn’t want to be named, said Reliance Life Sciences Ltd, the health care company owned by promoters of Reliance Industries Ltd, was in talks with Torrent for a controlling stake.
Reliance Life chief executive K.V. Subramanian was not available for comment as he was travelling. Mint could not independently confirm the development.
The drug company, part of the Gujarat-based power-to-biotech Torrent Group, had recently bought two overseas firms to reach into the global generics market.
The company’s market valuation as on Tuesday was Rs1,565. 28 crore.
An industry analyst who tracks Torrent Pharma said he “will not be surprised if the management decides to sell the company, as the pharma venture was not making significant improvements in the (group’s) overall growth perspective”.
RBI suggests restriction for NBFCs on deposit taking
Mumbai: The Reserve Bank of India (RBI) has suggested that deposit taking non-banking finance companies (NBFCs) with capital and reserves of less than Rs2 crore may freeze their deposits at the current level.
A statement from the central bank on Tuesday said it is suggesting such a restriction “to ensure a measured movement towards strengthening the financials of all deposit taking non-banking finance companies” by increasing their net owned funds or capital and reserves to a minimum of Rs2 crore “in a gradual, non-disruptive and non-discriminatory manner”.
RBI also notified that asset finance companies, or companies engaged in financing automobile, general purpose industrial machinery and the like, which have a minimum investment-grade credit rating and a capital adequacy ratio of 12%, may bring down public deposits level to one-and-a-half times their capital and reserves while all other companies may bring down their deposits level at equal to their capital and reserves by 31 March 2009.
The total number of deposit taking NBFCs has come down from 710 at the end of June 2003 to 376 at the end of March. Public deposits held by them has come down from Rs5,035 crore as in March 2003 to Rs2,043 crore as on March 2007.
RBI deputy governor V. Leeladhar recently said at a banking conference in Mumbai that the central bank may consider restricting public deposit taking activities only to banks. Anup Roy
IPOs receive tepid response on Tuesday
New Delhi: Of the three small-sized initial public offerings, or IPOs, that closed for subscription on Tuesday, two—First Winner Industries Ltd and Archidply Industries Ltd—managed full subscription while Lotus Eye Care Hospital Ltd received subscription for only 61% of its shares as of 5pm on Tuesday.
“Investor sentiment is low in the secondary market, which is resulting in low subscription levels for IPOs,” said S. Ramesh, chief operating officer of Kotak Investment Banking.
“Many investors subscribe to IPOs for listing gains which exist in a bull market,” said Aseem Dhru, chief executive officer, HDFC Securities Ltd. “That incentive is missing in the current market scenario.” The result: low investor interest in the current issues. Sandeep Kumar singh/HT
DoT appoints panel to revisit spectrum norms
New Delhi: The department of telecommunications, or DoT, is revisiting its policy of spectrum allocation and pricing rules to hand out radio frequency rights to mobile phone service providers that are expanding their businesses and the new third generation, or 3G, phone services.
The ministry of communications and information technology, under which DoT operates, has constituted a committee to allocate air waves and decide on pricing, according to a DoT decision taken on Monday.
The committee is likely to meet in the first week of July. R. Jai Krishna