British-Swedish pharmaceutical firm AstraZeneca has made a voluntarily open offer to delist the Indian arm AstraZeneca Pharma India Ltd, according to a stock market disclosure. The board of the Indian company will hold a meeting on March 5, 2014 to consider and approve the delisting proposal.
Following the news, the Indian listed firm’s stock price surged 20 per cent to hit the upper circuit limit of the day at Rs 1110.90 per share on BSE in a weak Mumbai market on Monday.
At present, AstraZeneca owns 75 per cent of the total paid-up share capital of AstraZeneca Pharma. Going by the current market price, buying 25 per cent stake from the public shareholders would cost the Sweden-based promoters around Rs 694 crore ($112 million).
Bangalore-headquartered AstraZeneca Pharma is engaged in manufacturing, distributing and marketing pharmaceutical products in India. Internationally, it operates in three segments—healthcare, clinical trial services and co-promotional services.
During the October-December quarter of 2013-14, AstraZeneca Pharma registered sales of Rs 119 crore with a net profit of Rs 1.52 crore against a loss of Rs 17.7 crore in the same quarter the previous fiscal.
The latest open offer from AstraZeneca comes in the wake of a string of such moves by MNCs looking to hike stake in Indian public listed arms.
Most recently Moody’s said it plans to raise its holding in credit rating agency ICRA. Last year, its arch rival McGraw Hill Financial Inc, which controls S&P, had acquired additional stake in India’s top credit rating agency CRISIL.
Previously, Unilever Plc, the world’s second-largest consumer goods company, increased stake in its local arm Hindustan Unilever (HUL) from 52.48 per cent to 67.28 per cent for $3.2 billion, in the biggest ever open offer in the history of Indian capital markets. The stake was purchased through a voluntary offer by Unilever where it sought to increase its holding to up to 75 per cent in an offer worth $5.4 billion.
In another big open offer, which started last month, global drug maker GlaxoSmithKline Plc (GSK) is looking to raise its holding in its Indian pharma arm GlaxoSmithKline Pharmaceuticals Ltd from 50.7 per cent to 75 per cent in what may cost it up to Rs 6,386 crore or a little over $1 billion.
(Edited by Joby Puthuparampil Johnson)