Elder Pharmaceuticals rose 3.04% to Rs 281 at 9:46 IST on BSE, with the stock recovering on bargain hunting after recent slide triggered by the firm selling its domestic formulation business to Torrent Pharmaceuticals for Rs 2004 crore.
Meanwhile, the S&P BSE Sensex was up 87.69 points or 0.42% at 20,747.21.
On BSE, so far 97,000 shares were traded in the counter as against average daily volume of 2.07 lakh shares in the past two weeks.
The stock was volatile. The stock rose as much as 4.29% at the day's high of Rs 284.40 so far during the day. The stock lost as much as 2.58% at the day's low of Rs 265.65 so far during the day.
Shares of Elder Pharmaceuticals (Elder) had tumbled 16.05% in two trading sessions to settle at Rs 272.70 from a recent high of Rs 324.85 on 12 December 2013 after the company during trading hours on 13 December 2013 announced that Torrent Pharmaceuticals (Torrent) has entered into a definitive binding agreement with Elder to acquire its branded domestic formulations business in India, and Nepal (India business) for a consideration of Rs 2004 crore.
Elder's India business comprises a portfolio of over 30 brands with market leading products across the women's healthcare, pain management, wound care and neutraceuticals therapeutic segments.
The India business is being sold as a going concern on a slump sale basis, and the transaction will also involve the transfer of employees engaged in sales, marketing and operations of the India business. Under the proposed transaction, Elder will continue to manufacture and supply the products at its existing manufacturing facilities for Torrent for a period of three years, the company said in a statement.
Torrent would fund the acquisition value through a mix of internal accruals and bank debt.
Elder's existing brand equity in the areas of women healthcare and pain management will help Torrent strengthen its position in the Indian market expanding into these fast growing areas.
The transaction has been approved by the boards of directors of both companies. The transaction is subject to customary conditions precedent including shareholder approval and applicable regulatory approvals and is expected to close in the first half of 2014, the companies said.
Torrent Pharmaceuticals is the flagship company of the Torrent Group. Torrent has a fully-equipped Research Center, employing almost 600 scientists, to support the company's operations and product pipeline for both domestic and overseas markets. The company's manufacturing plants locatedat lndrad, Baddi & Sikkim have facilities to produce Formulations and Bulk drugs. The plants are approved by authorities from various regulated and semi-regulated markets like US, UK, Brazil, Germany, Australia and South Africa.
Elder Pharmaceuticals' consolidated net profit tumbled 86.69% to Rs 3.14 crore on 32.76% decline in net sales to Rs 271.68 crore in the quarter ended September 2013 over the quarter ended September 2012.
Elder Pharmaceuticals is an integrated pharmaceutical player, headquartered in Mumbai, with a strong presence in the domestic formulation business. The company has a strong presence in therapeutic segments such as Women's Healthcare, Pain Management, Wound Care and Neutraceuticals with market leading brands such as Shelcal, Chyrnoral, Eldervit, Formic and Carnisure. The company has six manufacturing facilities for manufacturing formulations and APls and R&D facility located in Nerul (Maharashtra) to provide analytical and development support.
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