Shares of Torrent Pharmaceuticals declined for the third straight day in a row on Friday (September 1) after reports emerged that the pharma company is looking to acquire a controlling stake in the bigger rival Cipla Ltd.

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Cipla Ltd shares, on the other hand, were trading with gains on Friday after closing nearly 2 percent higher in the previous session.

Torrent Pharma shares opened higher by 1.43 percent but soon lost steam and fell to a low of Rs 1,830.60 apiece due to profit taking in the stock. Torrent Pharma shares closed 5.66 percent lower on Thursday with trading volume surging by more than 1.79 times on BSE.

Meanwhile, the BSE has sought clarification from the company over reports that suggested Torrent Pharma is in talks to acquire Cipla Ltd.

Sources told CNBC-TV18 that Torrent Pharma is looking to acquire a controlling stake in Cipla, which is the fourth-largest domestic pharma company.

Cipla’s revenue was more than double of Ahmedabad-based Torrent Pharma’s revenue in FY 2022-23.

Sources said that Torrent Pharma has likely submitted a non-binding bid for the bigger rival, and started a due diligence process.

Reports suggested that the Ahmedabad-based firm was exploring options to form a consortium with 3-4 private equity funds such as Baring PE Asia-EQT and Blackstone.

Torrent Pharma is said to be assessing funding options and may make a decision on a binding bid in the coming weeks, according to sources.

As per initial evaluation, about 5 percent of domestic sales of Torrent Pharma overlap with Cipla and acquisition of a controlling stake in the latter would provide a key opportunity to expand its reach in India and the United States.

Torrent Pharma shares were trading 1.13 percent lower at Rs 1,822.70 apiece while Cipla traded higher by 0.22 percent at Rs 1,260 apiece on BSE at 9.44 AM.

First Published:Sept 1, 2023 12:28 PM IST