Daiichi’s $3.6 bn exit from Sun Pharmaceutical hits rupee, stocks

By: | Published: April 21, 2015 2:46 PM

Concerns about foreign outflows weigh after Japan's Daiichi Sankyo's $3.6 billon share sale in Sun Pharmaceutical Industries.

daiichi, Daiichi stake sale, Daiichi Sun Pharma, Daiichi Sankyo, Daiichi Sun Pharma stake sale, Sun Pharma, Sun Pharma Daiichi, Sun Pharmaceutical, sun pharma share price, business newsJapanese drug maker Daiichi Sankyo today sold its entire stake of around 9 per cent in Sun Pharmaceutical Industries for over Rs 20,420 crore, which it received after merger of Ranbaxy Laboratories in the Indian firm, ending its seven years of tumultuous experience in the country.

The Indian rupee fell to a three-and-a-half month low on Tuesday and stocks sank to their lowest in nearly four weeks on concerns about foreign outflows after Japan’s Daiichi Sankyo’s $3.6 billon share sale in India’s Sun Pharmaceutical Industries.

Daiichi Sankyo began the sale late on Monday, according to a person directly involved in the deal and a marketing term sheet seen by Reuters.

Worries over retrospective taxation on foreign portfolio investors prompted them to sell stocks worth 15.07 billion rupees ($239.93 million) on Monday, also weighing on sentiment.

“Daiichi’s share sale is having some impact but the underlying trend has weakened due to equity-led worries around Jan-March earnings and retrospective taxes on profits of foreign investors,” said Subramanian Sharma, director at Greenback Forex.

The rupee should trade between 62.50 to 63.80 in the near term, he added.

The partially convertible rupee pared some of its earlier losses to trade at 62.85/86 after earlier falling to 63.1550 per dollar, its lowest since Jan. 8.

However, it was not clear whether the entire $3.6 billion in the Daiichi deal would flow out of India or if some of the money would be reinvested with domestic investors including Sun Pharma.

The broader 50-share NSE index was down 0.1 percent after earlier falling as much as 0.8 percent to its lowest since March 30.

Sun Pharma shares slumped as much as 10.9 percent, heading towards their biggest daily fall since June 2009.

The stock was down 8.5 percent at 0751 GMT.

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