Novartis India Stock Up 17% After Swiss Parent Decides To Exit Indian Arm

Novartis AG to Sell Stake in Indian Subsidiary to ChrysCapital

Swiss pharma major Novartis AG has made the decision to sell its stake in the listed Indian subsidiary Novartis India to private equity firm ChrysCapital.

Stock Price Surge

The move lifted the stock of Novartis India on Friday, with shares trading at Rs 976, over 17% higher than their closing price of Rs 830 on Thursday.

Details of the Deal

• Novartis AG holds a 70.68% stake in its Indian arm.
• A consortium of WaveRise Investments, ChrysCapital Fund X and Two Infinity Partners will buy the stake for Rs 860.64 per share, a 3.6% premium to the company’s closing price on Thursday.
• Novartis India will produce medicines for the treatment of diabetes and chronic neurological, cardiological and dermatological illnesses.
• ChrysCapital will have a controlling stake in Novartis India.
• Axis Capital is the manager of the deal.

Private Equity Firm's Expansion

ChrysCapital will have the right to nominate certain individuals for appointment as directors on the board of directors of Novartis India.

Financial Performance

According to the third-quarter financial results of Novartis India, the company reported revenue of Rs 356.27 crore and net profit of Rs 100.90 crore.

Regulatory Requirements

As per Sebi norms, after the execution of the share purchase agreement, the consortium will be required to make a mandatory open offer to the eligible public shareholders of the company.

Future Plans

After the consummation of the transaction, the name of the company may be changed, subject to receipt of necessary approvals.

ChrysCapital has stakes in pharma companies such as Intas Pharma, Eris Lifesciences, Corona Remedies and La Renon, marking the maiden majority stake buy for the private equity firm in the Indian pharma industry.