Torrent Pharma Share Price To Be In Focus On The Announcement To Buy Controlling Stake In JB Chemicals

Torrent Pharma shares will be in focus on Monday, June 30, after the company announced plans to buy a controlling stake in JB Chemicals & Pharmaceuticals from global investment firm KKR at an equity valuation of Rs 25,689 crore on a fully diluted basis.

The move will be followed by a merger of the two companies, further strengthening Torrent's position in the Indian pharmaceutical market and expanding its global presence.

Torrent Pharma's Stock Movement:

Torrent Pharma closed at Rs 3,375 on Friday, June 27, gaining Rs 152.50 or 4.73% for the day. The stock had opened at Rs 3,350, hit a high of Rs 3,377, and a low of Rs 3,287 on the NSE. It has touched a 52-week high of Rs 3,590.70 and a 52-week low of Rs 2,755.90. The company's current market value (market capitalisation) is Rs 1.13 lakh crore.

About the Acquisition:

The acquisition will happen in two phases. First, Torrent will purchase a 46.39% stake in JB Pharma through a Share Purchase Agreement (SPA) for Rs 11,917 crore at Rs 1,600 per share. This will trigger a mandatory open offer to acquire up to 26% more shares from public shareholders at Rs 1,639.18 per share.

Torrent also plans to buy up to 2.80% of shares from JB Pharma employees at the same price offered to KKR. In the second phase, JB Pharma will merge with Torrent Pharmaceuticals under a scheme of arrangement. Shareholders of JB Pharma will receive 51 shares of Torrent for every 100 shares they currently hold.

"We are pleased to have on board the JB Pharma heritage and build on the platform for the future. Torrent's deep India presence and JB Pharma's fast growing India business, combined with the CDMO and international footprint offers immense potential to scale both revenue and profitability.

This strategic alignment furthers our goal of strengthening our presence in the Indian pharma market, and build a larger diversified global presence. Moreover, the CDMO platform provides a new long-term avenue of growth for Torrent," said Samir Mehta, Executive Chairman of Torrent Pharma.

The merger is expected to enhance Torrent's capabilities in chronic therapies, ophthalmology, and the Contract Development and Manufacturing Organization (CDMO) segment - areas where JB Pharma has a strong presence.

"Over the past five years, JB Pharma has emerged as one of India's fastest growing pharmaceutical players, owing to KKR's strategic guidance, stewardship of our independent directors and a focused strategic and executional excellence by the management team.

We have built a strong foundation to deliver market-leading growth, as well as consistent improvement in profitability in the medium and long term. As we now enter a new chapter alongside Torrent Pharmaceuticals, we are confident that the combined strengths of our organizations will unlock greater opportunities to enhance healthcare access across our markets." Said Nikhil Chopra, CEO and Whole Time Director of JB Pharma.

What's Next: Regulatory Approvals?

The deal is subject to regulatory approvals from SEBI, the Competition Commission of India (CCI), Stock Exchanges, the National Company Law Tribunal (NCLT), and others. No new shares will be issued as part of the agreement, and there are no expected conflicts of interest.

Once complete, this will become the second-largest pharma acquisition in India, after Sun Pharma's 2015 acquisition of Ranbaxy Laboratories.