Novartis India Promoter to Divest Entire 70.68% Stake, Open Offer Triggered at Rs 860.64 Per Share
Shares of Novartis India Ltd are set to attract significant investor attention after its promoter, Novartis AG, agreed to sell its entire 70.68 per cent stake in the company. The stake is being acquired by a consortium comprising WaveRise Investments, ChrysCapital Fund X, Two Infinity Partners, ChrysCapital X LLC, and OceanEdge Investments Limited. The deal has triggered a mandatory open offer for an additional 26 per cent stake from public shareholders.
Open Offer Details
The acquirers have announced an open offer to purchase up to 64,19,608 fully paid-up equity shares of Novartis India, each with a face value of Rs 5, from public shareholders. Key highlights of the open offer include:
- Open offer price: Rs 860.64 per share
- Premium over last closing price: 3.64% above Thursday's closing price of Rs 830.45
- Shares under open offer: Up to 26% of the total voting share capital
- Total consideration: Up to Rs 552.49 crore, payable in cash
Stake Sale Structure
Promoter Novartis AG is offloading 1,74,50,680 shares, representing its complete 70.68 per cent holding in Novartis India. This is a full exit by the global pharmaceutical giant from its Indian listed subsidiary.
To facilitate the transaction, Novartis India's board of directors approved the execution of a company covenant and warranty deed with both the seller and the acquirers. The company confirmed that it has provided certain customary warranties on a non-recourse basis to the acquirers concerning the company and its business operations.
Post-Transaction Obligations
Following the completion of the deal, Novartis India has committed to several key obligations:
- The company will change its name to remove all references to the Novartis seller group within 120 days of transaction completion.
- The company will provide reasonable assistance and information required by the acquirers in connection with the mandatory open offer to public shareholders.
- Novartis India will complete all relevant regulatory filings as part of its post-closing obligations.
What This Means for Investors
This transaction marks a significant ownership shift for one of India's well-known pharmaceutical companies. The entry of ChrysCapital — one of India's most prominent private equity firms — as a key acquirer signals strong institutional confidence in the business's long-term prospects.
For existing public shareholders, the open offer at Rs 860.64 per share presents an opportunity to tender shares at a premium to the market price. However, investors should carefully evaluate the company's future direction, including its upcoming rebranding, before making any decisions.
The change in promoter group and the eventual name change will mark the beginning of a new chapter for the company, and market participants will be closely watching how the new management steers operations going forward.
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