Cipla’s promoters are in various stages of negotiations with private equity majors such as Blackstone and Baring Private Equity Asia to divest a part of their holding in the pharmaceutical company. The promoters, who hold 33.47% stake in the firm, would use the proceeds to improve operational efficiencies.
An investment banking firm has been hired to advise Cipla on the deal, according to a media report.
Cipla, meanwhile, said in a regulatory update: “We hereby clarify that the company is not aware of any event that requires disclosure under listing regulations.” Blackstone also declined to comment on the matter.
According to the media report, the move is seen as a step towards succession planning for the company. The PE firms would look at investing in lieu of about 25% stake, for which they would form a consortium. With a market capitalisation of over $10 billion, a 25% stake in the pharma firm would need an investment to the tune of $2.5 billion.
The company’s chairman YK Hamied and vice chairman MK Hamied are octogenarians, while executive vice chairperson Samina Hamied is the only member from the family’s second generation to lead the company. Hence, the company needs to put in a “clear succession roadmap”, the report said.
The promoters are looking to bring in strategic investors who can revamp, help enhance capital allocation and improve operational efficiencies.
Shares of Cipla, which was up by 11.78% during intra-day trade, ended up 9.62% at `1,171.55 on the BSE on Thursday.
