Natco Pharma Demerger: How Many Shares Will Shareholders Receive Following the Demerger?

Synopsis: NATCO Pharma shares rose after announcing a demerger of its agrochemicals business, with a 1:1 share entitlement for shareholders. Investors will receive one share of the new entity for every share held. The move aims to unlock value, improve business focus, and enhance growth visibility across both segments.

NATCO Pharma has declared its plan to demerge its agrochemicals business into a separate entity named Natco Crop Health Sciences Ltd. This is part of a strategic plan to unlock shareholder value and improve operational efficiency. This news is important for shareholders of NATCO Pharma, as it will affect their shareholding position.

With a market cap of Rs 17,500 crore, the shares of Natco Pharma Ltd jumped about 4% in today’s trading session and reached a high of Rs 987.05. When compared to its previous day’s closing price of Rs 949.70. The shares are trading at a PE of 11.3, whereas their industry’s PE is at 26.6.

A share ratio of 1:1 facilitates easy value unlocking

The share exchange ratio for shareholders of NATCO Pharma has been set at one equity share of the new entity for every one share held by shareholders of NATCO Pharma. This indicates a share exchange ratio of 1:1. This means shareholders of NATCO Pharma will retain their current shares in NATCO Pharma and will also be entitled to an equal number of shares in the new entity.

Lack of any cash component serves to underscore that this is a pure equity-based demerger, where shareholders will get a direct stake in the value of both companies. This also facilitates easier value unlocking for shareholders, as they will get a direct proportionate number of shares based on their existing holding.

Also, the existing shareholder pattern will continue for NATCO Pharma, and shareholders will get a direct listing of the agrochemical business. This facilitates easier value unlocking for the verticals.

Focused businesses and future growth potential

With the demerging process, shareholders will have a direct 80% stake in the newly formed organisation, while the remaining 20% will be held by NATCO Pharma itself. This ensures that shareholders continue to have a complete economic interest in the agrochemicals business, directly and indirectly.

NATCO intends that the demerging process will help in the development of a focused growth strategy for the pharmaceuticals as well as the agrochemicals businesses, which have different risk-return profiles. This will help in improving operational efficiencies, capital management, and investor interest in these verticals.

Thus, with a 1:1 share allotment, shareholders are not diluted, and they continue to reap the benefits of future growth in these organisations, making the demerging process a structurally positive move from a long-term perspective itself.

Financials

The revenue from operations for the company stood at Rs 647 crore in Q3 FY26 compared to the Q3 FY25 revenue of Rs 475 crore, up by about 36 per cent YoY. Similarly, the net profit stood at Rs 151 crore in Q3 FY26, up compared to the Rs 132 crore profit in Q3 FY25.

NATCO Pharma Limited

Natco Pharma is a pharmaceutical firm based in India, specialising in the development, manufacture, and marketing of formulations as well as active pharmaceutical ingredients (APIs). The firm has a significant presence in oncology drugs and focuses on niche segments with high research potential.

Natco Crop Health Sciences

Natco Crop Health Sciences specialises in the agrochemical business, specifically in the production of crop protection solutions, which include pesticides, herbicides, and bio-solutions. This business contributes significantly to the productivity of crops in the agriculture sector.

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