CLSA is of the view that the Cronus Pharma acquisition cancelled allays capital allocation concern, adding that key near-term trigger is value unlocking from the ongoing demerger of the injectable portfolio.
Aurobindo Pharma share price rose over 4 percent in the morning session on August 23 after global research firm CLSA maintained outperform call on the stock.
The brokerage firm has retained its outperform call with a target of Rs 830 per share. It is of the view that the Cronus Pharma acquisition cancelled allays capital allocation concern, adding that key near-term trigger is value unlocking from the ongoing demerger of the injectable portfolio.
The pharma company on August 20 said that its Rs 450-crore deal to acquire a 51 percent stake in Cronus Pharma Specialities India Pvt Ltd (Cronus) has been cancelled.
On August 12, the company had announced that it had entered into definitive agreements to subscribe to fresh equity shares in Hyderabad-based Cronus, a generic veterinary pharmaceutical products firm engaged in the development, manufacturing and sale of these items.
The company had entered into binding agreements with Cronus for the acquisition of 51 percent ownership by subscribing to 95,059,963 equity shares of Rs 10 each at a premium of Rs 34.18 per equity share aggregating to Rs 420 crore.
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In a regulatory filing on Friday, Aurobindo Pharma said, “The board of directors in its meeting held today has approved the termination of the aforesaid agreements, and the parties have mutually agreed and terminated the said agreements.”
The stock was trading at Rs 710.60, up Rs 29.15, or 4.28 percent at 09:33 hours. It has touched an intraday high of Rs 725.90 and an intraday low of Rs 703.85.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.