Torrent Pharma, based in Ahmedabad is currently considering acquiring a stake, in Cipla, a company. Should this acquisition be successful it has the potential to position Torrent Pharma as India’s pharmaceutical company.
Torrent Pharma, based in Ahmedabad is believed to have submitted a bid to acquire a stake, in Cipla, a leading company. The final decision on whether to make a binding offer will be made by Torrent Pharma in the weeks.
Sources indicate that Torrent Pharma is also engaged in discussions with three to four equity firms and foreign institutions as it explores funding options for the potential acquisition.
This year it was reported that the promoters of Cipla were exploring options for a stake sale and were in talks with equity firms like Blackstone and BPEA EQT. Given that the second-generation promoters of Cipla, YK Hamied (Chairman) and MK Hamied (Vice Chairman), are now octogenarians(a person who is between 80 and 89 years old) there is a need for a clear succession plan within the company.
Samina Hamied, Executive Vice Chairperson remains the only member from the 2nd generation actively leading Cipla.
Furthermore, recent reports suggest that Torrent Pharma aims to gain control of the Hamied family’s stake in Cipla – an investment equivalent to double its(Cipla’s) consolidated revenue, for FY23. Additionally, this stake represents 2.3 times its profit and 1.46 times its current market value.
Furthermore, the competition to acquire the family’s stake, in Cipla involves major players such as Blackstone, a prominent buyout fund, and Baring PE Asia EQT.
If the potential deal with Torrent materializes it would result in the formation of India’s pharmaceutical company in terms of revenue trailing only behind Sun Pharma. In response to the report, Torrent Pharma has released a statement through an exchange filing neither confirming nor denying the news.
At 10;42 am shares of Torrent Pharma were trading at Rs 1,789.45 on the National Stock Exchange showing a decline of 2.88 percent. Similarly Ciplas stock on the NSE was down by 0.020 percent and trading, at Rs 1,257.35.
