Granules India Promoter Sells 7.5M Shares, Worth ₹300+ Crore, to Clear Debt; Stock Up 4%

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Granules India Promoter Sells 7.5M Shares, Worth ₹300+ Crore, to Clear Debt; Stock Up 4%

Team FS

22/May/2024

Key Points:

Granules India's promoter, Krishna Prasad Chigurupati, sells 3.09% equity, valued at ₹303.81 crore, in a block deal.
Chigurupati's decision aimed at clearing personal debt and creating personal liquidity, without plans to sell further holdings.
Despite the sale, Granules India's financial performance remains robust, with an 8% YoY increase in net profit and recent USFDA approvals enhancing its market position.

Granules India, a prominent player in the pharmaceutical industry, witnessed a significant development as its promoter, Krishna Prasad Chigurupati, divested a portion of his equity holdings. The sale, amounting to 75 lakh equity shares or 3.09% equity, fetched ₹303.81 crore in a block deal. Chigurupati's primary objectives behind this "one-time activity" were to alleviate personal debt and create personal liquidity. However, it's noteworthy that he assured the company of no plans to further sell his shareholdings in the foreseeable future.

Market Response: Stock Performance and Financial Health
The announcement of Chigurupati's share sale elicited a positive response from investors, as shares of Granules India surged by 3.77% to reach an intra-day high of ₹424.55 apiece on the Bombay Stock Exchange (BSE). This uptick reflects investor confidence in the company's underlying strength and its ability to navigate through strategic changes in shareholding.

Financial Snapshot: Robust Performance Amidst Share Sale
Despite the share sale, Granules India's financial performance remains robust. The company reported an 8% year-on-year (YoY) increase in net profit for the March quarter, totaling ₹129.6 crore compared to ₹119.6 crore in the corresponding period last year. However, revenue from operations witnessed a slight decline, decreasing by 1.7% YoY to ₹1,175.7 crore. Notably, Granules India's net debt reduced by 10% quarter-on-quarter to ₹842 crore, with a net debt-to-EBITDA ratio standing at 0.98 times, indicating a healthy balance sheet position.

Strategic Milestones: USFDA Approvals and Regulatory Compliance
In addition to the share sale, Granules India achieved significant milestones in its pharmaceutical endeavors. The company received approval from the United States Food and Drug Administration (USFDA) for Colchicine capsules, used in preventing gout attacks. This approval, attributed to Granules Pharmaceuticals Inc (GPI), a wholly-owned foreign subsidiary, underscores the company's commitment to expanding its product portfolio and penetrating key international markets.

Furthermore, Granules India's Unit V facility in Anakapalle, Visakhapatnam, Andhra Pradesh, received zero 483 observations from the USFDA following an inspection. This regulatory compliance reaffirms Granules India's adherence to stringent quality standards, enhancing its reputation as a reliable and trusted pharmaceutical manufacturer.

Conclusion: Navigating Through Change with Resilience
Granules India's recent developments highlight its resilience and adaptability in navigating through changes in shareholding and regulatory landscapes. Despite the share sale by its promoter, the company continues to maintain a strong financial footing and pursue strategic initiatives aimed at long-term growth and sustainability. With a robust product pipeline, enhanced market presence, and unwavering commitment to quality, Granules India stands poised for continued success and value creation in the pharmaceutical domain.

Also Read : Gaining Momentum: Strides Pharma Surges with USFDA Approval for Stomach Ulcer Treatment Drug

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Granules India Promoter Sells 7.5M Shares, Worth ₹300+ Crore, to Clear Debt; Stock Up 4%

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