MC EXCLUSIVE ChrysCapital in final stage talks to acquire parent Novartis AG's stake in Novartis India

Novartis AG holds a 70.68 per cent stake in its listed Indian arm which had a market cap of Rs 2,050.45 crore

• ChrysCapital nears deal to acquire Novartis AG's stake in Novartis India
• Deal could prompt open offer, boost ChrysCapital's pharma footprint
• Novartis AG holds 70.68% of Novartis India, worth Rs 1,450 crore

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Following protracted negotiations for over a year, top home-grown private equity firm ChrysCapital has entered final stage discussions to acquire the majority stake of Swiss parent Novartis AG in pharma firm Novartis India, multiple industry sources in the know told Moneycontrol on the condition of anonymity.

"ChrysCapital has been the sole player in the fray for several months and is now gearing to pick up a controlling stake in Novartis India ," one of the persons above told Moneycontrol.

Novartis AG holds a 70.68 per cent stake in its listed Indian arm which had a market cap of Rs 2,050.45 crore at the end of day's trade on February 19. At these levels, the Swiss pharma major's stake is valued at nearly Rs 1,450 crore. The Indian unit's share price has dipped by 11.63 per cent in the last six months.

According to a second person, "If things go as per plan, both parties are likely to sign a binding pact shortly followed by an official announcement. The deal will trigger an open offer. ”

A third person elaborated, “If the transaction goes through, this will be the first majority bet for ChrysCapital in the pharma space and the firm can use Novartis India as a platform to scale up and expand its domestic portfolio in the segment. Its earlier transactions in the pharma sector have been minority deals."

All the three persons above spoke to Moneycontrol on the condition of anonymity.

Moneycontrol could not elicit an immediate response to email queries sent to ChrysCapital, Novartis AG and Novartis India and is awaiting a response from the firms. This article will be updated as soon as we hear from the parties.

Novartis AG’s plan to sell its stake in Novartis India is on track, CEO Vas Narasimhan confirmed in January 2025 at the World Economic Forum in Davos during an interaction with CNBC-TV18.

Responding to an earlier email query from Moneycontrol, Novartis India had said, "Novartis AG, the majority shareholder in Novartis India Limited (NIL) announced its decision to review its stake in NIL and the Board of NIL took note of the same. As a company, NIL is not privy to the process of strategic review and does not have any information about any conclusive action on this matter."

The proposed transaction is part of a strategic review of Novartis India Limited announced in February 2024.

"The strategic review will include an assessment of the 70.68 per cent shareholding of Novartis AG in the company," the announcement had said.

"Novartis Healthcare Private Limited includes the Novartis Corporate Center in Hyderabad, the commercial arm of Novartis in India, and R&D teams, which currently conduct clinical trials at more than 300 trial sites in the country. The strategic review will not impact Novartis Healthcare Private Limited" the announcement added.

Novartis India has a portfolio of products for the treatment of diabetes and chronic neurological, cardiological and dermatological illnesses. Painkiller Voveran is one of its key brands. For FY24-25, the firm posted revenues of Rs 356.27 crore and net profit of Rs 100.90 crore.

ChrysCapital's existing investments in the pharma segment include Intas Pharma, Eris Lifesciences and Corona Remedies and La Renon.