Cipla shares jump 6% to hit new highs; Blackstone may acquire promoter stake

Shares of Cipla surged more than 6 per cent during the early trading session on Friday to hit its new all time high amid the buzz that the private equity funds may buyout the entire promoter stake in the pharma major, making their exit from the company. According to media reports, world’s largest private equity fund Blackstone is set to submit a non-binding bid to acquire the entire 33.47 per cent promoter stake in Cipla. The reports, citing sources familiar with the matter, said that the bid could be submitted as early as next week. Amid the stake sale buzz, shares of Cipla gained more than 6 per cent to Rs 1,238.55 on Friday, hitting its new record high, before giving up its gains partially. The company's total market capitalization was just shy of Rs 1 lakh crore mark. The scrip had settled at Rs 1,165 on Thursday. The move will also trigger an open offer for an additional 26 per cent of Cipla, upon full subscription of which Blackstone would end up owning as much as 59.4 percent of Cipla's stake, according to the reports.  The reports of talks between the two parties floated in the media last month. The stake sale will formally start the exit of the Hamied family who had founded Cipla, India’s third-largest generics company by revenues, which was started in 1935. Cipla is renowned for advocating affordable drugs and challenging pharma's pricing strategies in emerging markets. Pharmaceutical major Cipla reported a 45 per cent year-on-year (YoY) growth in consolidated net profit for the June 2023 quarter to Rs 996 crore. The total revenue from operations grew by nearly 18 per cent to Rs 6,329 crore, while EBITDA grew 31 per cent to Rs 1,494 crore and operating margins came in at 23.6 per cent, expanding 234 basis points.

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