45 Times in Volume: Pharma Stock Locked in 20 per cent Upper Circuit After…

The Indian pharmaceutical landscape shifted significantly today as Novartis India shares surged by 20 per cent to hit their Upper Circuit following a major divestment announcement. Swiss parent company Novartis AG has entered into a Share Purchase Agreement to sell its entire 70.68 per cent controlling stake to a consortium led by private equity firm ChrysCapital. This news propelled the stock to early morning highs of Rs 959.65, a sharp recovery from its previous close of Rs 830.45, bringing the company’s total market capitalisation to approximately Rs 2,460 crore. The shares of the company saw a Spurt in Volume by more than 45 times on the BSE.

The transaction involves the sale of over 1.74 crore shares to three specific entities: WaveRise Investments, ChrysCapital Fund X, and Two Infinity Partners. WaveRise is set to become the largest shareholder with a 56.45 per cent stake acquired at Rs 860.64 per share, while the other two partners will pick up smaller portions at Rs 701.25 per share. The total deal value is estimated at Rs 1,445.89 crore, marking a definitive exit for the Swiss multinational from its Indian arm's shareholding structure.

In accordance with SEBI regulations, this change in control has triggered a mandatory open offer for the company's public shareholders. The ChrysCapital-led consortium, supported by Axis Capital as the offer manager, proposes to acquire an additional 26 per cent of the voting share capital at a price of Rs 860.64 per share. This cash offer, valued at up to Rs 552.50 crore, provides a liquidity window for minority investors as the company prepares for a complete overhaul of its promoter group and corporate identity.

Once the deal concludes, Novartis AG will be reclassified as a public shareholder, and the company must undergo a total rebranding process. Per the agreement, all references to the "Novartis" name and brand must be removed within 120 days of the closing. Despite this total change in leadership, the new owners have confirmed they have no immediate plans to delist the company, committing instead to maintaining the mandatory 25 per cent minimum public shareholding required for listed firms in India.

Disclaimer: The article is for informational purposes only and not investment advice.