Cipla promoters in talk with Blackstone, Baring Asia for stake sale: Report

Sources familiar with the matter told Money Control that the drug maker's shareholders are looking to sell a part of their total 33.47% stake in the firm to strategic investors who can oversee a revamp, help enhance capital allocation and improve operational efficiency.

An investment bank has been hired to advise on the deal, and Blackstone, Baring Asia, among others, are in talks to explore a deal, a recent Money Control report said, citing three independent sources.

“They (promoters) are evaluating options for a strategic investor to come on board to revamp future strategy to enhance capital allocation, operational efficiency to improve return metrics,” the report said, further citing one of the sources.

However, the company is not aware of any event that requires disclosure under listing regulations, Cipla said in a exchange statement.

The drug maker has issued a clarification on CNBC-TV18, saying that "the company is not aware of any event that requires disclosure under Listing Regulations. The company will make appropriate disclosure in compliance with the listing regulations as and when any such requirement arises."

Also Read: Cipla Net Profit Up 45 Percent At Rs 526 Crore In Q4

The promoters are believed to have mandated Kotak for the exercise, sources told TOI. Last year, the promoter family had offloaded around 2% through block deals for about Rs 1,830 crore. In the past, the promoter family had denied speculation of any stake sale, saying it was fully committed to the business.

The people in the know of the deal also mentioned that with the second generation promoters, YK Hamied and MK Hamied, Chairman & Vice Chairman Cipla, respectively being octogenarians and Samina Hamied, Executive Vice Chairperson, being the only member from the second generation to lead Cipla, the company needs a clear road map on succession.

A source also told Money Control that the promoters are “well-coordinated” and have been taking active role in the company’s operations. “Succession issue has been a long standing concern at Cipla, company needs a clear leadership plan. It has been often seen as a takeover candidate for this reason," one of the sources shared.