Shares of Glenmark Pharmaceuticals on Friday ended over 3 per cent lower after the company said its board has approved divestment of 75 per cent stake in its subsidiary Glenmark Life Sciences to Nirma Ltd for Rs 5,651.5 crore.
The stock opened on a weak note and declined 6.40 per cent to Rs 775 on the BSE during the day. It later ended at Rs 802.25, down 3.12 per cent.
At the NSE, it fell 6.36 per cent to Rs 775 apiece during the day. Shares of the company ended at Rs 803.05, lower by 2.97 per cent.
Shares of Glenmark Life Sciences, however, recovered during the afternoon trade and climbed 2.95 per cent to settle at Rs 645.60 on the BSE.
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Glenmark Pharmaceuticals on Thursday said its board has approved divestment of 75 per cent stake in its subsidiary Glenmark Life Sciences to Nirma Ltd for Rs 5,651.5 crore, and proceeds would be used to repay debt and deleverage the balance sheet.
As per the definitive agreement, the Mumbai-based drug maker will offload 75 per cent stake in Glenmark Life Sciences (GLS) to Nirma Ltd at a price of Rs 615 per share.
After the divestment, Glenmark, which currently owns 82.84 per cent in GLS, will own just 7.84 per cent stake after the completion of the transaction, the drug firm said in a statement.
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Nirma will make an open offer for a 17.15 per cent stake in GLS at an offer price of Rs 631 per share.
Later addressing a virtual press conference, Glenmark Pharmaceuticals Chairman and Managing Director Glenn Saldanha said a major reason for the stake sale in GLS was the divergent business models of the company and its subsidiary.
He noted that the generic drugs environment has changed over the years and is highly competitive, especially in the US market.
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