Strides Arcolab jumped 3.85% to Rs 827.05 at 9:27 IST on BSE on media reports that the prime minister Manmohan Singh has cleared the foreign direct investment proposal of Strides Arcolab-Mylan deal.
Meanwhile, the BSE Sensex was down 215.45 points, or 1.16%, to 18,382.73
On BSE, 19,000 shares were traded in the counter compared with average volume of 80,987 shares in the past one quarter.
The stock hit a high of Rs 834.60 and a low of Rs 802.90 so far during the day. The stock hit a record high of Rs 1,224.90 on 5 December 2012. It hit a 52-week low of Rs 552.65 on 1 August 2013.
The stock had outperformed the market over the past one month till 16 August 2013, falling 0.15% compared with the Sensex's 6.31% decline. The scrip had, however, underperformed the market in past one quarter, falling 9.61% as against Sensex's 8.15% fall.
The mid-cap-cap company has an equity capital of Rs 59.10 crore. Face value per share is Rs 10.
According to media reports, the Prime minister Manmohan Singh on Friday, 16 August 2013, cleared the Strides Arcolab-Mylan deal, overruling the concerns raised by Department of Industrial Policy and Promotion (DIPP) and Ministry of Health.
The Foreign Investment Promotion Board (FIPB) had kept its approval on the deal in abeyance till there was clarity on brownfield foreign direct investment (FDI) norms one in which acquisition is built into a new project.
Now, the deal will be brought to the Cabinet Committee on Economic Affairs (CCEA) under existing policy to get the final approval, reports suggested.
On 28 February 2013, Bangalore-based Strides Arcolab and US-based Mylan signed the agreement under which the US drug major was to acquire Agila Specialties, the injectible medicine business of Strides.
Under the terms of the agreement, Strides and its subsidiary will receive an aggregate sum of $1600 million in cash on closing and a potential additional consideration of up to $250 million subject to the satisfaction of certain conditions by Strides. As announced simultaneously, the division recorded sales of $255 million and EBITDA of $86 million for the year ended 31 December 2012, Strides said in a statement.
Strides will continue to operate and develop its Pharma business and front-end businesses in India and Africa. Strides will also focus on developing a fully integrated Biotech business which will be fully funded post this transaction, Strides said in a statement.
Meanwhile, the Reserve Bank of India (RBI) on Tuesday, 13 August 2013, directed all the custodian banks not to facilitate any purchase transactions on behalf of foreign institutional investors (FIIs) in the company till further intimation, Strides Arcolab said in a statement.
The company also said that the RBI is currently reviewing the matter of raising FII limit in the company with the Government of India.
Earlier on 5 August 2013, Strides Arcolab informed that its shareholders approved hiking investment limit of FIIs to 74% of the paid up equity share capital of the company under the portfolio investment scheme.
The company had later made necessary intimation to RBI, confirming the shareholders' approval for increasing FII investment limit.
Currently, the ceiling on investment by FIIs in Strides Arcolab is 49%. Total foreign holding in the company was 55.21% as at 30 June 2013, of which 51.77% was held by FIIs.
Strides Arcolab reported net profit of Rs 2.16 crore in Q2 June 2013 as against net loss of Rs 19.90 crore in Q2 June 2012. Net sales declined 7.27% to Rs 150.83 crore in Q2 June 2013 over Q2 June 2012.
Strides Arcolab is a global pharmaceutical company headquartered in Bangalore. The company develops and manufactures a wide range of IP-led niche pharmaceutical products with an emphasis on sterile injectables.
Powered by Capital Market - Live News
