Cipla Shares Soar By 6% Amid Blackstone Buying Promoter’s Stake Buzz

Shares of Cipla surged by 6%, reaching a new record high to Rs 1,238 per share amid reports of Blackstone set to submit a non-binding bid to acquire the entire promoter’s stake next week.

The promoters of India’s third-largest pharma company, the Hamied family, own around 33.47% in the drugmaker. This will formally start a process of the exit of the Hamied family who started the company in 1935, as per The Economic Times report.

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Earlier, a Moneycontrol report revealed that Cipla promoters were looking to sell part of their holdings as part of the succession plan.

The shares of Cipla have reportedly leapfrogged over by 15%. At 11:20 am, shares of Cipla were trading at Rs 1,214.60, up 4.18% on the National Stock Exchange. Blackstone's move will also trigger an open offer for an additional 26% of the company. Upon full subscription, Blackstone would end up owning as much as 59.4% of Cipla.

“They are evaluating options for a strategic investor to come on board to revamp future strategy to enhance capital allocation and operational efficiency to improve return metrics,” sources were quoted as saying by ET.

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“Succession issue has been a long standing concern at Cipla, the company needs a clear leadership plan. It has been often seen as a takeover candidate for this reason,” the report added.

Cipla reported a 45.1 percent growth in consolidated net profit to Rs 995.7 crore for the April-June quarter for FY24, as against Rs 686.38 crore clocked in the same period a year ago.