‘Painful to learn...’: Congress’ Jairam Ramesh on Blackstone buying Cipla promoters’ stake

Blackstone is expected to submit a non-binding bid next week for acquiring over 33% promoter stake in India's third-largest generics company by revenues ‘Cipla’, according to a report published by Economic Times.

With this, the eventual exit process of the Hamied family from the company started in 1935, will be formally started.

Congress general secretary Jairam Ramesh expressed disappointment over Blackstone's decision to acquire a stake in Cipla, India's oldest pharmaceutical company.

“It was painful to learn that Blackstone, the world's largest private equity fund, is negotiating to acquire the entire 33.47% promoter stake in Cipla, India's oldest pharmaceutical company,” Ramesh wrote on X.

He said that Cipla was established in 1935 by Khwaja Abdul Hamied who was profoundly impacted by Mahatma Gandhi, Nehru Sardar Patel, and Maulana Azad. “He also played an important role in creating CSIR,” the Congress leader said.

Ramesh further called Cipla “a shining example of Indian nationalism” and an integral part of India's political, economic, and social history.

“Cipla soon emerged as a shining example of Indian nationalism and his son Yusuf Hamied made Cipla a global supplier of low-cost generic medicines and successfully challenged American, German and British monopolies and patent holders. He paved the way for many other Indian companies to establish themselves in different countries,” he added.

Moneycontrol earlier reported that Cipla's top shareholders are in talks to sell around 33.47% of their stake in the company to private equity players including Blackstone and Baring Asia. The company hired an investment bank to advise on the deal

“Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 (Listing Regulations), we hereby clarify that the Company is not aware of any event that requires disclosure under Listing Regulations. The Company will make appropriate disclosure in compliance with the Listing Regulations as and when any such requirement arises," the company said in a regulatory filing.

Drug major Cipla posted a 45.1% rise in its consolidated net profit in Q1FY24 at ₹995.7 crore as compared to ₹696.4 crore in the corresponding quarter of the last year.

The company’s revenue during the quarter ended June 2023 increased 17.7% to ₹6,328.9 crore from ₹5,375.2 crore, YoY, driven by performance in India, US and South Africa.

The company’s US business reported the highest-ever revenue of $222 million, registering a growth of 43% YoY growth driven by robust momentum in differentiated portfolios.

Cipla raised its EBITDA margin guidance for FY24 to 23% from 22% earlier. The management raised its North America (NA) base business quarterly run-rate guidance to $210-215 million from $195 million earlier.

Strong US sales growth and sustained momentum in the domestic market helped Cipla Q1 performance beat estimates. This led analysts to give bullish outlook on Cipla shares with most brokerage houses raising target price on the stock. said