Jagsonpal Pharma rallies 19% on open offer by Infinity Holdings Group

Shares of Jagsonpal Pharmaceuticals rallied 19 per cent to Rs 244.50, hitting a 52-week high on the BSE in Tuesday's intra-day trade, after Infinity Holdings Group made an open offer to buy 26 per cent stake in the company at a price of Rs 235 per share.

In the past one week, the stock of the pharmaceutical company has surged 48 per cent from a level of Rs 165.75. In comparison, the S&P BSE Sensex down 1 per cent at 11:33 AM; having fallen 2 per cent in the past one week.

Infinity Holdings is an open-ended investment company registered under the laws of Mauritius, with a principal focus on investments in companies that have substantial operations in or otherwise a nexus to South Asia and other countries in the Indian Ocean region.

On Monday, Jagsonpal Pharmaceuticals said after market hours that the company and Infinity Holdings have entered into a share purchase agreement (SPA) for acquisition and sale of 11.46 million equity shares, constituting 43.73 per cent of the voting share capital of the Company. The Purchaser Group (Infinity Holdings, Infinity Holdings Sidecar and Infinity Consumer Holdings) would also be making an open offer to acquire equity shares of the Company representing 26 per cent.

Pursuant to the open offer and the transactions contemplated in the SPA, the Purchaser Group shall become the promoters of the Company and the Seller Group (Aresko Progressive Private Limited (acting in capacity as a trustee of the Aresko Progressive Trust and as the representative partner of J&P Investments Partnership)) will continue to also remain classified as 'promoters' of the Company and will hold a significant minority with certain minority interest protection rights, said Company. The promoters held 70.34 per cent stake in Jagsonpal Pharmaceuticals at the end of December 31, 2021, the shareholding pattern data shows.

Jagsonpal Pharmaceuticals' products are primarily focused on women's health and orthopedics. For the nine months ended December 2021 (9MFY22), the company posted 64 per cent year-on-year (YoY) growth in net profit at Rs 20 crore, on back of 20 per cent YoY jumped in revenue from operations at Rs 174 crore. Earnings before interest tax and depreciation and amortization (EBITDA) margin expanded 400 bps at 14 per cent.

The company said the management has identified potential growth levers and operational improvement initiatives. The implementation of the growth levers and initiatives could contribute to high-teens revenue growth over the next 5 years and EBITDA margins above 20 per cent.