Novartis India Jumps as Swiss Parent Plans Sale of 71% Stake

The stock price of Novartis India skyrocketed on Friday after its parent company announced that it is selling its entire stake in the publicly-listed Indian unit.

Novartis AG to Sell 70.68% Stake in Novartis India

Reuters reported that pharmaceutical giant Novartis AG would sell its 70.68% stake in Novartis India to a consortium for ₹14.46 billion, or around $159 million. 

The consortium, composed of WaveRise Investments, ChrysCapital and Two Infinity Partners, also made an offer to buy an additional 26% stake from Novartis India’s public shareholders for ₹860.64 per share. The offer will cost around ₹5.52 billion if fully accepted.

Continued Presence in India

According to a statement published on Friday, Novartis AG already informed the board of Novartis India that it is transferring its shareholding.

But the Swiss firm clarified that it will continue its presence in the country through its wholly owned subsidiary, Novartis Healthcare Private Limited (NHPL).

“Aligned with our global strategy, we are expanding our innovative Cardio Renal Metabolic and Oncology portfolio, marked by recent launches and a strong pipeline of innovative medicines for India,” Novartis AG said.

“Novartis India Limited (NIL), an independent public company listed on BSE Limited, is separate from Novartis Healthcare Private Limited. The transfer of Novartis AG shareholding in NIL will not impact Novartis Healthcare Private Limited operations.”

With the development, Novartis AG will no longer hold any share in the Indian arm and cease to be in control of the company. Novartis India may also change its name subject to regulatory and corporate approvals. 

Novartis India Stock Price Up by 20%

The share price of Novartis India soared following news of its parent company’s exit plan. At time of writing, the stock is trading for ₹996.50, up by 20% from the previous close of ₹830.45.