Share prices of the largest pharmaceutical company in India moved up by 1.36 percent in the morning trade of Thursday to Rs. 1,317.7 versus its previous close at Rs. 1,299.
With a market cap of Rs. 3,15,117 crore, Sun Pharmaceuticals Industries Ltd has given over 23 percent of returns in the past six months and nearly 26.5 percent in the last one year. So far, the company has given over 4.30 percent of returns in 2024.
According to the details mentioned in the filings on the stock exchanges, Sun Pharmaceutical Industries Limited has entered into a definitive merger agreement with Taro Pharmaceutical Industries Ltd.
Sun Pharma is to acquire all of the outstanding ordinary shares of Taro other than the shares already held by Sun Pharma or its affiliates. It currently holds a 78.5 percent stake in Taro.
The price at which the shares are acquired is $43 per share in cash without interest, amounting to approximately Rs. 2,891.76 crores for 8,086,818 shares constituting 21.52 percent of the total outstanding shares of Taro.
Taro Pharmaceutical Industries Ltd (Taro) is listed on the New York Stock Exchange (NYSE) and is a multinational, science-based pharmaceutical company for the discovery, development, manufacturing and marketing of the highest quality healthcare products.
Taro had agreed to pay more than $200 million to settle criminal allegations concerning price-fixing, in July 2020. The company’s consolidated revenue from operations for FY22-23 was Rs. 4,604.25 crores while in FY21-22 it was Rs. 4,181.39 crores.
Before this merger agreement, Sun Pharma signed a marketing and distribution agreement with Bayer for the introduction of a second brand of Finerenone in India.
Financially, the company has been maintaining a healthy dividend payout of 56 percent and delivered good profit growth of 26.4 percent CAGR over the last five years. However, it has delivered a poor sales growth of 10.6 percent over the last five years.
The company’s revenue from operations on a year-on-year basis grew by 11.32 percent from Rs. 11,941 crore in June 2023 quarter to Rs. 12,192 crore in September 2023 quarter, accompanied by a net profit of Rs. 2,006 crore in June 2023 quarter to Rs. 2,385 crore in September 2023 quarter.
As of December 2023, FIIs hold 17.08 percent of the shares, whereas DIIs hold 19.42 percent of the shares in the company, aggregating to 36.5 percent of the institutional holdings.
With a presence in specialty, generics and consumer healthcare products, Sun Pharma is the largest pharmaceutical company in India and the world’s fourth-largest specialty generics company.
Written by Shivani Singh
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