Novartis AG signs pact with ChrysCapital to sell majority stake in Novartis India

Novartis India has a portfolio of products for the treatment of diabetes and chronic neurological, cardiological and dermatological illnesses

• Novartis AG to sell majority stake in Novartis India to ChrysCapital
• ChrysCapital must make an open offer at Rs 860.64 per share
• This is ChrysCapital's first majority buy in Indian pharma sector

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Swiss parent Novartis AG has entered into an agreement for the sale of its 70.68 per cent stake in Novartis India to leading Indian private equity firm ChrysCapital, the listed Indian arm announced on February 20 in a stock exchange disclosure.

Earlier on February 19, Moneycontrol was the first to report that ChrysCapital was in final stage talks to pick up a majority stake in Novartis India.

Pursuant to the execution of the share purchase agreement, the acquirers will be required to make a mandatory open offer to the eligible public shareholders of the company as per Sebi norms. The open offer price is Rs 860.64/share and is being managed by investment bank Axis Capital, as per exchange disclosures.

According to stock exchange disclosure, entities related to ChrysCapital will acquire a controlling stake in Novartis India in the manner set out below:

Acquirer 1 shall acquire 56.45 per cent of the equity share capital of the company at a price of Rs 860.64 per equity share, acquirer 2 shall acquire 10.32 per cent of the equity share capital of the company at a price of Rs 701. 25 per equity share and acquirer 3 shall acquire 3.91 per cent of the equity share capital of the target company at a price of Rs 701.25 per equity share.

At the end of day’s trade on February 19, the share price of Novartis India was Rs 830.45/share and the firm had a market cap of Rs 2,050.45 crore.

As per the deal terms, ChrysCapital will have the right to nominate certain individuals for appointment as directors on the board of directors of Novartis India and post the consummation of the transaction, the name of the target company (Novartis India) may be changed subject to receipt of necessary approvals.

The deal marks the maiden majority stake buy for ChrysCapital in the Indian pharma segment. The firm’s existing investments in the sector include Intas Pharma, Eris Lifesciences, Corona Remedies and La Renon.

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.

(This is a breaking news copy and will be updated later)