BackGlenmark Life Sciences share price falls 2% as Nirma readies to buy 75% stake in it
Nirma to acquire 75 per cent stake in Glenmark Life Sciences for ₹5,651 crore; Glenmark Pharma to sell stake.
PremiumGlenmark Life Sciences share price declined over 2 per cent in early trade on BSE on Friday (September 22). The stock opened at ₹625.10 against the previous close of ₹627.10 and slipped 2.3 per cent to the level of ₹612.75.
On Thursday (September 21), the company said Nirma had agreed to buy a 75 per cent stake in it for ₹5,651.5 crore in a deal that values the company at ₹7,535.4 crore.
Mint reported first on 15 August that the cement-to-detergent maker was the sole bidder for the stake put on the block by parent Glenmark Pharmaceuticals Ltd, which is selling shares to Nirma at ₹615 apiece.
Nirma will make a mandatory open offer to all public shareholders of Glenmark Life Sciences for an additional 17.15 per cent stake at ₹631 a share. The life sciences company listed on the bourses in August 2021 at ₹720 a share. The sale will be subject to various conditions, including receipt of regulatory and shareholder approvals.
Glenmark Pharma will use the money from the sale to repay debt.
Read more: Nirma to buy Glenmark Life Sciences for ₹5,651 crore
Meanwhile, Glenmark Pharmaceuticals will sell a 75 per cent stake in its subsidiary unit Glenmark Life Sciences, to Nirma for ₹615 per share for an aggregate consideration of ₹5.651.75 crore. The Mumbai-based drugmaker will continue to own a 7.84 per cent stake in Glenmark Life Sciences with the stake reduction.
Read more: Glenmark Pharma to divest 75% stake in subsidiary Life Sciences unit to Nirma for ₹5,651 crore
Glenmark Life Sciences share price has gained about 51 per cent in the last one year against a 12 per cent gain in the equity benchmark Sensex. The stock hit its 52-week high of ₹674 on August 1 this year and its 52-week low of ₹369 on February 22 this year on BSE.
Glenmark Life Sciences reported revenue of ₹578.45 crore for the June quarter (Q1 FY24), up 18 per cent year-on-year (y-o-y). Net profit during the period stood at ₹135.45 crore, up 24 per cent. It saw a 14.1 per cent increase in the cost of raw materials to ₹298.21 crore. The company reported an EBITDA (earnings before interest, taxes, depreciation, and amortization) of ₹195 crore, a 24.8 per cent rise y-o-y.
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