Cipla Share Price Rise 4% Following 2.53% Stake Sale by Promoter Family

Shares of Cipla soared by 4% in opening trade on 15 May, following three block deals on the exchanges. Approximately 2.04 crore shares constituting a 2.53% stake in the pharmaceutical company were traded in these deals.

Parties Involved and Financial Details

Parties involved in the transaction were not immediately identified. But as per the reports on 14 May indicated that the promoter family and Okasa Pharma were looking to offload up to a 2.53 percent stake. The sale was expected to generate ₹2,637 crore for the sellers. Block trade includes a lock in period of 90 days for the sellers.

As per Cipla's latest shareholding data the promoter family holds a 33.47 percent stake in the company. Hamied family comprising chairman Yusuf Hamied his younger brother MK Hamied and his daughter Samina all in non executive roles had previously sold a 2.5 percent stake through open market transactions in February 2020.

Exit Strategies & Stock Performance

As per August 2023 reported if the Cipla promoter's exit plans via mergers and acquisitions or M&A did not proceed they might sell part of their stake via block deals. On 15 May 2024 the shares were offered at a price range of ₹1,289.50 to ₹1,357.35 per share representing a discount of 0-5% compared to Cipla's closing share price of ₹1,357.35 on May 14, 2024.

Cipla's stock has had a strong performance in 2024 with a 45% increase so far outperforming the benchmark Nifty 50 index, which has gained 21.3%. This recent spike is reminiscent of the events on July 27, 2023 when similar reports about stake dilution led to a nearly 12% jump in Cipla's stock price to ₹1,171.55 on the BSE.

Cipla Q4 Highlights

Pharma major Cipla reported a 78.7% increase in its consolidated net profit for the March quarter reaching ₹931.87 crore from ₹521.51 crore net profit recorded in the same period last year. The company's total revenue from operations for the quarter grew to ₹6,163.24 crore up from ₹5,739.3 crore in the corresponding quarter of the previous year. However, total expenses also increased amounting to ₹5,153.31 crore compared to ₹4,946.14 crore in the same period last year.

For the entire fiscal year 2024, Cipla reported consolidated total revenue from operations of ₹25,774.09 crore, an increase from the ₹22,753.12 crore reported for the fiscal year 2023. This impressive growth in profit and revenue highlights Cipla's strong performance over the past year.

Final Words

Recent block deals and the promoter family's potential exit strategies highlight movements within Cipla's shareholder structure. Investors are closely watching these developments given Cipla's strong market performance and the implications of the promoter family's stake reduction.