Cipla Promoter Group Sells Stake Worth Rs 2,637 Crore

On Wednesday, May 15, 2024, Cipla Ltd’s promoter group, including Shirin Hamied, Rumana Hamied, Samina Hamied, and Okasa Pharma Private Limited, sold over 2.04 lakh shares, or 2.53% of the company’s equity, through block deals. The company clarified in a stock exchange filing that the purpose of the sale was “to create liquidity for specific needs including philanthropy.” Following this transaction, the promoter group’s total holding in Cipla has reduced to 33.46%

As of May 15, 2024, Cipla’s share price is trading at Rs 1,417.1, reflecting a rise of 4.41% compared to the previous day’s closing price.

Cipla’s Recent Performance

It’s important to note Cipla’s financial performance in the context of this shareholding change. For the quarter ending March 2024, the company reported a consolidated net profit of Rs 939 crore, a significant increase of 79% year-on-year compared to Rs 525.6 crore in the same period last year. This figure surpassed analyst estimates of Rs 923.5 crore.

Revenue from operations also witnessed growth of 7.4% to Rs 6,163 crore for the March quarter, compared to Rs 5,793 crore in the corresponding quarter of the previous fiscal year. However, the bottom line fell short of analyst expectations of Rs 6,250.9 crore.

Cipla’s earnings before interest, tax, depreciation, and amortization (EBITDA) grew 12% year-on-year to Rs 1,316 crore, with margins expanding by 80 basis points to 21.3%. However, this fell short of market expectations of nearly Rs 1,408 crore for EBITDA and a margin of 22.5%.

About Company 

Established in 1935, Cipla is a global pharmaceutical company renowned for its focus on agile and sustainable growth. With a presence in over 80 markets, Cipla is ranked as the 3rd largest pharmaceutical company in India and holds a significant position in key international markets. Beyond its commercial success, Cipla is recognized for its humanitarian approach to healthcare, epitomized by initiatives such as offering triple anti-retroviral therapy for HIV/AIDS at an affordable price.

Conclusion

The recent stake sale by Cipla’s founders comes amidst a period of strong financial performance for the company. While the specific philanthropic initiatives remain undisclosed, the move highlights the evolving ownership structure of Cipla. With the promoter group’s holding reduced, it will be interesting to see how this shift in ownership impacts the company’s future direction and strategic decisions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.