Glenmark Prescription drugs Ltd is contemplating promoting a majority stake in Glenmark Life Sciences to pare debt, stated two individuals aware of the event.
Kotak Mahindra Capital Co. Ltd has been employed to run the sale course of, and the corporate has contacted buyout funds to gauge investor curiosity, the individuals stated.
The corporate had explored a stake sale in its lively pharmaceutical ingredient (API) enterprise in 2019 however then opted for an inventory in 2021 after spinning off the entity as Glenmark Life Sciences.
Glenmark Prescription drugs and Kotak Mahindra Capital didn’t reply to queries until press time.
The shares of Glenmark Life Sciences have been buying and selling at ₹408.20 apiece, down by over 45% from its itemizing worth of ₹720 per share. The corporate’s market capitalisation stood at a bit over ₹5,000 crore on Monday on BSE.
“They’re asking for the IPO (preliminary public providing) worth,” stated one of many two individuals cited above, in search of anonymity.
“The corporate must promote not less than 7% over the following 12 -15 months to satisfy the itemizing pointers,” the second particular person stated, additionally requesting anonymity.
Though promoters are exploring a majority stake sale, the deal’s construction could possibly be sophisticated because it must conform to itemizing norms.
Glenmark Prescription drugs nonetheless owns a 82% stake in Glenmark Life, and should deliver it all the way down to 75% by August 2024, that’s, inside three years of itemizing. Moreover, a stake sale of 25% will set off a requirement for an open provide of one other 26% from public shareholders, which might not be doable as public float is at 18%.
The corporate has been promoting non-core property to generate money. In December, it offered cardiac model Razel in India and Nepal for ₹313.7 crore, and stated it was in keeping with “Glenmark’s technique of specializing in different sub-categories of the cardiovascular phase”. The corporate will give attention to cardio-metabolic, respiratory, dermatology, and oncology, it stated in December.
In 2022, Glenmark offered 9 dermatology medicine to Eris Life Sciences for ₹340 crore. The deal closed in January.
“Glenmark has used proceeds from the divestment of its manufacturers in India for remediation of its US-based amenities, whereas the pathway to scale back ₹26 billion of web debt stays unsure,” Elara Capital stated in a report on 13 February.
Glenmark’s gross debt was ₹4,210 crore and web debt at ₹2,620 crore as on December 2022 finish, it stated. Moreover, Glenmark has introduced down its web debt by ₹100 crore since September. International foreign money debt was at $440 million, and web debt stood at $340 million in December. The corporate’s Monroe facility didn’t meet US regulatory necessities, and remediation value for Q3FY23 was at ₹130 crore, Elara Capital stated in its report.
Glenmark Life Sciences reported a 1% rise in quarterly revenue for the December quarter on the again of progress in APIs. “Liquidity ought to be supported by funds obtainable from divestment of some of its dermatology and cardiac manufacturers over December and January. Any vital payout for settlement of claims as per the anti-trust ruling could affect liquidity and the debt metrics and will likely be a key monitorable,” Crisil Credit score stated in a ranking report on 25 January.
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