20% Upper Circuit: Pharma Stock Skyrockets After Promoters Sell 71% Stake to 3 Private Equity Firms

Synopsis: Shares of Novartis India hit a 20% upper circuit after promoter Novartis AG announced the sale of its 70.68% stake to WaveRise Investments, ChrysCapital Fund X, and Two Infinity Partners. The change in control and expected open offer sparked strong investor interest and optimism over potential strategic restructuring.

The shares of this company, which is primarily a marketing and distribution-focused pharmaceutical company, were in momentum today after the company announced its promoter stake sale to 3 private equity firms, shifting the promoter ownership status.

With a market cap of Rs 2,460 crore, the shares of Novartis India Ltd hit 20% U.C in today’s trading session and reached a high of Rs 996.50. When compared to its previous day’s closing price of Rs 830.45, the shares are trading at a PE of 23 compared to its industry PE of 27.7.

About the stake sale 

Novartis India Limited was the major upper circuit stock at 20%, mainly because of the news that its promoter, Novartis AG, will divest its 70.68% stake (17,450,680 shares) to three buyers: WaveRise Investments, ChrysCapital Fund X, and Two Infinity Partners. Such a large change in control is a significant corporate event, which usually causes a drastic reaction in stock prices.

The deal also requires a compulsory open offer to the public shareholders as per the SEBI Takeover Regulations. Usually, investors also expect that an open offer is made at a premium to the current market price, which causes the stock to move towards the upper circuit.

Moreover, the fact that the global parent has made a complete exit and the private equity-supported investors have entered the market indicates that a strategic restructuring or revival of the business might be on the cards. This is because markets tend to view such instances of control transfer as the starting point of changes in the business or unlocking value.

Lastly, the announcement has made it clear that the acquiring companies will become the promoters of the company, and this has created hopes of a change in the governance structure and a possible revival strategy.

Financials

The revenue from operations for the company stood at Rs 86 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 93 crores, down by about 8 per cent YoY. Similarly, the net profit stood at Rs 16 crore in Q3 FY26, down compared to the Rs 25 crore profit in Q3 FY25.

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