A day after posting a stellar quarterly performance, drugmaker Cipla hit the headlines again, with reports of its promoter family looking to dilute their stake in the company. Following the news, the stock jumped over nearly 12 per cent to ₹1,171.55 on the BSE.
However, in a clarification to exchanges, Cipla said it was not aware of any event that required disclosure under the Listing Regulations. “The Company will make (an) appropriate disclosure in compliance with the Listing Regulations as and when any such requirement arises,” Cipla told.
Currently, promoters hold 33.47 per cent stake in the company.
Earlier, media reports, quoting unnamed sources, said an investment bank had been assigned the task and Blackstone and Baring Asia were reported to be in talks.
Succession plans
Reports involving Cipla’s succession plans come up every few years, often attributed to succession-planning, as Cipla doyen and Non-Executive Chairman YK Hamied is over 80 years. The last time around when the company undertook an exercise, that was seen as being succession planning and staving off takeover bids, it eventually ended with Hamied’s niece Samina Hamied, being appointed to the board of directors in July 2015.
Samina, daughter of Non-Executive Vice Chairman MK Hamied, has been with Cipla since 2011 and is presently the company’s Executive Vice Chairperson. She represents the third generation of the founding family. Cipla promoters hold over 33 per cent in the company.
In 2013, Samina was designated Head of Strategic Projects – Cipla New Ventures. She was appointed as an Executive Director of the Company from July 2015 and subsequently elevated as the Executive Vice-Chairperson from September 1, 2016. She is said to be instrumental in driving the company’s transformation agenda.
Cipla is not the only drugmaker that is constantly visited by the succession question, despite a promoter family member being part of top management. Late last year, private equity Advent International picked up majority stake in Suven Pharmaceuticals; and this year a Unichem promoter sold stake to Ipca Labs. According to experts, the absence of a strong next-generation presence to run the company often was a factor that drove such decisions.
Cipla shares closed on BSE at ₹1171.55, just shy of a 10 per cent increase, on Thursday.