Shares of Glenmark Pharmaceuticals on Friday fell over 6 per cent after the firm announced the divestment of a 75 per cent stake in its subsidiary Glenmark Life Sciences (GLS) to Nirma Ltd for Rs 5,651.5 crore. On Thursday the pharma giant said that its board has approved the divestment of the majority stake in Glenmark Life Sciences to Nirma Ltd and proceeds would be used to repay debt and deleverage the balance sheet.
The firm's shares on Friday opened on a weak note and declined over 6.40 per cent to Rs 775 on the BSE. It fell over 6.36 per cent on NSE.
At 1.30 AM, Glenmark Pharmaceuticals Ltd was trading down 3.35 per cent at Rs 800.35 per share on BSE.
Following the stake transfer, Glenmark Pharma will own 7.84 per cent of GLS. The transaction is subject to customary conditions precedent, including receipt of regulatory and shareholder approvals. Pursuant to the transaction, Nirma Ltd will make a mandatory open offer to all public shareholders of GLS.
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Glenn Saldanha, Chairman and Managing Director, Glenmark Pharmaceuticals Limited said, "This deal aligns with Glenmark’s strategic intent of moving up the value chain to become an innovative/brand led organisation, with continuous focus on our core therapeutic areas of dermatology, respiratory and oncology. It also presents an opportunity for us to strengthen shareholder value through deleveraging and enhancing our overall return profile.”
Yasir Rawjee, Managing Director and CEO, Glenmark Life Sciences Limited said, “We will continue to operate as an independent API company under the new ownership of Nirma Limited. I see this as an opportunity to further strengthen our position in the API industry and continue the growth trajectory.”
GLS, which was listed in 2021, manufactures active pharmaceutical ingredients (APIs), which are the key biologically active elements in a drug. GLS counts drugmakers such as Aurobindo Pharma and Torrent Pharmaceuticals as clients and also exports APIs to markets including Japan, Latin America, and the Middle East.