Cipla Shares Jump 6%, Hit 52-Week High Amid Blackstone Acquisition Reports

Drugmaker Cipla’s shares surged up to 6.3 per cent to hit a fresh 52-week high on the BSE in the early trade on Friday, after reports that the world’s largest private equity fund, Blackstone, is likely to acquire the entire 33.47 per cent promoter stake in the pharma major.

Blackstone is expected to submit a non-binding bid next week for the Hamied family’s stake in the company, reported The Economic Times. The potential acquisition indicates the beginning of a process that could eventually lead to the Hamied family’s exit from the company they established in 1935.

At 01:15, the stock was trading at 1,209.75, up 43.90 or 3.7 per cent on the NSE.

According to reports, the buyout will also trigger an offer for an additional 26 per cent of Cipla, upon full subscription of which Blackstone would end up owning as much as 59.4 per cent of Cipla’s stake.

Cipla is India’s third-largest generics company by revenue. It is renowned for advocating affordable drugs and challenging the pharma industry’s pricing strategies in emerging markets.

The pharma major reported a 45 per cent year-on-year (YoY) increase in consolidated net profit for the April-June 2023 quarter to Rs 996 crore. The total revenue from operations rose nearly 18 per cent to Rs 6,329 crore, while EBITDA rose 31 per cent to Rs 1,494 crore. The operating margins increased 234 basis points to 23.6 per cent.

Cipla’s India business witnessed robust growth across branded prescription, trade generics, and consumer health over the last fiscal year, resulting in 12 per cent growth in the One-India franchise.

The US business reported 43 per cent YoY growth in revenue to $222 million, on the back of robust momentum in the differentiated portfolio.