Biocon shares tumble 6% on firm's proposed investment in biosimilar unit: Here's the likely reason

The shares of Biocon fell more than 6 percent on December 4 as the pharma company is set to consider investment into subsidiary Biocon Biologics through purchase of shares from existing shareholders for cash or through issuance of shares of company.

The shares of the pharma company fell to Rs 384.20 apiece, the lowest level seen by the stock in nearly three weeks. The stock has now snapped a two-session gaining streak.

Biocon on December 3 announced that the company's board will hold a meeting on December 6 to consider and approve the proposed investment in its Biocon Biologics, which is its biosimilar arm, via the "purchase or acquisition of securities from shareholders of BBL, for cash and/or consideration other than cash through issuance and allotment of fully paid-up equity shares of the Company on a preferential allotment basis through private placement to such shareholders".

The board will also consider the proposal to raise funds via the commercial paper through private placement and equity shares or any other eligible securities, through one or more methods including qualified institutions placement, rights issue, preferential issue and further public offer, in one or more tranches.