By Varinder Bansal, CNBC-TV18

There is a party that is going in the pharmaceutical space and the Zenotech Lab will be the first stock in focus. Daiichi came in and said that they will be making an open offer of 20% and we can see that the stock is up nearly 20% and has been buzzing.

Ranbaxy holds nearly 45% stake in this company. So whether it is 35% or whether it is 55% after the open offer, Daiichi has to make a necessary open offer for this company. Of course, the price is not known at this point and there is a lot of speculation, which is going in the market and is not right to point at this point of time.

In other group companies, such as Orchid Chemicals, Jupiter Biosciences and Krebs Biochemicals - Ranbaxy holds anywhere between 14%-15% stake. All the price movement on all these three stocks are flaring up anywhere between 10% and 15%; Orchid was up 10% the last time we checked. So whether one considers 35% or 55%, an indirect holding - in both the cases for these three companies will be anywhere between 5%-8%, which necessarily does not trigger an open offer. So that is why in the listed space only Zenotech Lab, where the open offer will be there. 

When calculated on conjecture basis, that is Rs 600-800 per share - it’s a huge premium that Ranbaxy will stand to get out of this deal.  One important thing is that the price what we have been communicated or Daiichi has been saying that they will be paying around 300-400 billion yen. We do not know whether this price includes an open offer or whether this is only the promoter stake. So people are speculating all over this.

But if you have to consider that this includes an open offer price that means 55% of the total equity of Ranbaxy it means this amount when converted into rupees crore, will be around Rs 12,000-16,000 crore. They will pay for around 55% equity which means around 20.5 crore shares of Ranbaxy. So if you have to calculate per share value, this comes to between Rs 600-800 per share. The most important caveat here is that I am including the open offer in this price.  And people have their own ways of calculating it and so this is the range.  

But the reason why I am doing this is if you take out 20% and if you only consider 35% equity of the promoters’ stake then the number of shares will be only Rs 13 crore. This means the price could be anywhere between Rs 900-1,200 which seems a bit impossible. So the caveat I want to mention is that this 55% includes open offer price and the price range which people or in the market circles, people are calculating anywhere between Rs 600-800 per share.