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

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

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

Novartis AG has 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. This is a 3.6% premium to the company’s closing price on Thursday.

Novartis India informed the stock exchanges that the promoter of the company, Novartis AG, entered into an agreement for the sale and purchase of the shares in Novartis India Limited with WaveRise Investments, ChrysCapital Fund X and Two Infinity Partners on Thursday.

Novartis India produces medicines for the treatment of diabetes and chronic neurological, cardiological and dermatological illnesses.

ChrysCapital will have a controlling stake in Novartis India. This deal marks the maiden majority stake buy for ChrysCapital in the Indian pharma industry. The private equity firm has stakes in pharma companies such as Intas Pharma, Eris Lifesciences, Corona Remedies and La Renon.

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.

Axis Capital is the manager of the deal.

ChrysCapital will have the right to nominate certain individuals for appointment as directors on the board of directors of Novartis India. After the consummation of the transaction, the name of the company may be changed, subject to receipt of necessary approvals.

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.