Glenmark exploring stake sale in life sciences arm to reduce debt

Glenmark considering to sell stake at Glenmark Life Sciences

Indian pharma company giant Glenmark Pharmaceuticals Ltd is said to be in talks to sell a major chunk of its stake in Glenmark Life Sciences (GLS) to reduce its debt burden, Livemint has reported.

Shares of Glenmark Pharmaceuticals closed 1.19 percent higher at Rs 487.85 on NSE on April 10, while Glenmark Life Sciences was up 0.63 percent at Rs 408.65 apiece at market close.

The sale is said to be underwritten by Kotak Mahindra Capital. Neither Glenmark nor Kotak responded to Livemint's queries.

In 2019, the company had considered selling its stake in its active pharmaceutical ingredient (API) business but instead spun it off into a separate arm, GLS, which was then listed in 2021.

Glenmark is seeking the IPO price of Rs 720 a share of GLS, which is a premium of over 45 percent from the current market price, the report cited sources as saying. To meet listing guidelines, at least 7 percent of the stake needs to be sold in the next 12-15 months, they added. Glenmark owns 82 percent of GLS.

Moneycontrol couldn't verify the report independently.

Glenmark’s growing leverage is prompting the company to explore immediate measures, such as the stake sale. It sold nine dermatology drugs to Eris Life Sciences last year for Rs 340 crore. As of December, Glenmark’s gross debt was Rs 4,210 crore whereas net debt was at Rs 2,620 crore.