The media is back at speculating Granules sale… today’s report is that Carlyle is buying for $ 1Bn.
The current Mcap is well over that, the EV is even more and the market valuation is not considered expensive based on management guidance.
Does the media speculation make sense?
If I’m not mistaken 1 billion dollars ie 7400 crores is what they are paying to buy a controlling stake …not the valuation of granules. Current mcap is 10000 crores. So they are buying the promoters stake ie 42 percent + shareholders open offer to get a controlling stake. Which values granules at a higher mcap than current ie 15000cr+. Could explain the volume and breaking of resistance even under asm a few days ago since market reacted positive(we always get the news last). I could be mistaken since there isn’t a lot of info out at present. Will delete this post if I’m wrong so I don’t mislead anyone
The wordings in the CNBC rumor news is that " the deal is to buy the Co. for around 1 BN, likely to buy promoter shares" and then buyback. That’s why I’m questioning the veracity.
I think promoters would be selling at a higher price than the current market price discounting the future growth. It’s right now trading at 17 time trailing 12 months which is definitely not expensive considering the future growth. So, they are buying out promoters’ stake at 7500 crores . Maybe promoters are not exiting completely and acquirer will have to spend some money to buy from retail investors in an open offer. Since it’s not getting delisted, there no way they can get 100 percent shares at 7500 crores.
Yes I just watched the video of the speculated news. The VDO says that the nearly 1 BN is for promoter stake.
The text of the CNBC rumour is misleading.
Until few days back rumor is that KKR is buying Granules
Yesterday one Telugu news channel speculated that Advent international buying Granules
Today CNBC speculating that Carlyle buying Granules
In my opinion its better to ignore news channel speculations and wait for official announcement to come from company if any.
Disclosure: Invested
Was there any news on the acquisition/ stake sale front? I scanned around but did not see any and was trying to corelate it to the stock tanking today, when the rest of pharma index raced ahead…any insights, welcome…Thx
I believe others are also here for the long term as I am, I see such dips as oppourtunity to add more to the portfolio, eventually market dips at sellout, negetive news but since these are not long term, it shouldn’t end up affecting long time share performance.
If granules continue to give excellent results I am here to stay.
Granules CMD on CNBC
- Not participating in PLI
- Not willing to stake sale
- Work towards expanding business
Any update on the ASM rating for granules?
Mallinckrodt is the biggest competitor to Granules for Paracetamol product. As per the research report from Motilal from 2017(https://www.motilaloswal.com/site/rreports/HTML/636310421180066497/index.htm), Granules was 2nd largest after Mallinckrodt in Paracetamol API for regulated market… This should help Granules gain further market share from this competitor
FII/FPIs have continued consolidating their holding by increasing 0.07% (26.38% in Q3 to 26.31% in Q2)
Although minor but this is fourth quarter in continuation when FII holding has seen uptick… earlier 3 quarters, they grabbed it from retailers /LIC
Financial Institutions / Banks have reduced 0.2%
Retailers : Approx 27K new retailers joined the race i.e. jump of 21% in absolute numbers
Above addition resulted in increase of 1.02% in share holding (20.36% in Q3 to 19.34% in Q2)
Big Individuals (share capital>2Lacs) have once again trimmed their holding by 0.58% (5.27% in Q1 to 4.81% in Q2 to 4.23% in Q3)
No major exclusion is Q3
Corporate Bodies have further reduced their combined holding from 5.3% (Q1) to 4.2% (Q2) to 4.05% (Q3)
Metformin has been in news for so many manufacturers mainly on recall actions. As Granules is set to declare result in 2 weeks from now… good news of final approval coming at right time and good numbers expected as per management commentary… it will be interesting to watch the price action till Q3 numbers get published.
Chairman mentioned about some logistics issues in the interview because of Covid but has maintained the earlier guidance of 70% profit growth in FY21 and then another 30% profit growth in FY22. If i do the calculation then FY22 profit can be 740 cr. How much PE market will assign? 12 to 17 ? More or less? Free cash flow is still an issue for Granules. What are other pain points for Granules to sort out in your view before market gives it the valuation like other industry peers?