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Biocon shares up 2% after ADQ pumps Rs 555 crore in subsidiary

The transaction is subject to customary condition precedents and approvals. Post the completion of this transaction, Biocon Ltd will hold 89.89 percent stake in Biocon Biologics on a fully diluted basis, the company said.

January 08, 2021 / 09:52 AM IST
Biocon | Biocon Biologics received Rs 555 crore ($75 million) capital injection from ADQ. Transaction valued Biocon Biologics at around $4.17 billion.

Biocon | Biocon Biologics received Rs 555 crore ($75 million) capital injection from ADQ. Transaction valued Biocon Biologics at around $4.17 billion.

 
 
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Biocon share price gained 2 percent at open on January 8 after Biocon Biologics received Rs 555 crore capital injection from ADQ.

Biocon announced that the Board of its subsidiary Biocon Biologics Ltd has approved a primary equity investment by Abu Dhabi based ADQ, one of the region’s largest holding companies. As per the terms of the proposed agreement, ADQ will invest Rs 555 Crore for a 1.8 percent minority stake in the biosimilar business, valuing Biocon Biologics at a post money valuation of USD 4.17 billion, the company said in an exchange filing.

The transaction is subject to customary condition precedents and approvals. Post the completion of this transaction, Biocon Ltd will hold 89.89 percent stake in Biocon Biologics on a fully diluted basis, it added.

The stock was trading at Rs 463.85, up Rs 8.90, or 1.96 percent. It has touched an intraday high of Rs 466.00 and an intraday low of Rs 461.65.

"We welcome ADQ as our investment partner as we pursue our shared goal of expanding access to high quality affordable biopharmaceuticals to patients across the globe. We are committed to pursue our affordable innovation model to generate savings for the healthcare systems worldwide. This investment is an endorsement of the value that Biocon Biologics business has built as a fully integrated pure-play biosimilars company and will enable us to expand our capabilities further. The current investment has put post money valuation of Biocon Biologics at ~USD 4.17 billion,” said Kiran Mazumdar-Shaw, Executive Chairperson, Biocon.

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Global research firm CLSA has however a sell on the stock and has raised the target to Rs 260 from Rs 250 per share.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​
Moneycontrol News
first published: Jan 8, 2021 09:51 am

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