Elder Pharma slumps over 15% in two sessions

Elder Pharmaceuticals tumbled 7.64% to Rs 275.50 at 14:44 IST on BSE, extending Friday's 8.17% fall triggered by the company selling its domestic formulation business to Torrent Pharmaceuticals for a consideration of Rs 2004 crore.

The announcement was made during trading hours on Friday, 13 December 2013. Shares of Elder Pharmaceuticals fell 8.17% to Rs 298.30 on that day. It has fallen 15.19% in two session from Rs 324.85 on 12 December 2013.

Meanwhile, the BSE Sensex was up 1.44 points, or 0.01%, to 20,717.02.

On BSE, so far 2.54 lakh shares were traded in the counter, compared with an average volume of 55,824 shares in the past one quarter.

The stock hit a high of Rs 295 and a low of Rs 270.25 so far during the day. The stock hit a 52-week high of Rs 428.75 on 18 December 2012. The stock hit a 52-week low of Rs 202.15 on 14 May 2013.

The stock had outperformed the market over the past one month till 13 December 2013, rising 3.59% compared with the Sensex's 2.58% rise. The scrip had, however, underperformed the market in past one quarter, sliding 10.15% as against Sensex's 4.98% rise.

The small-cap company has an equity capital of Rs 20.54 crore. Face value per share is Rs 10.

Elder Pharmaceuticals announced that Torrent Pharmaceuticals has entered into a definitive binding agreement with Elder to acquire its branded domestic formulations business in India, and Nepal (India business) for a consideration of Rs 2004 crore.

Elder's India business comprises a portfolio of over 30 brands with market leading products across the women's healthcare, pain management, wound care and neutraceuticals therapeutic segments.

The India business is being sold as a going concern on a slump sale basis, and the transaction will also involve the transfer of employees engaged in sales, marketing and operations of the India business. Under the proposed transaction, Elder will continue to manufacture and supply the products at its existing manufacturing facilities for Torrent for a period of three years, the company said in a statement.

Torrent would fund the acquisition value through a mix of internal accruals and bank debt. Elder's existing brand equity in the areas of women healthcare and pain management will help Torrent strengthen its position in the Indian market expanding into these fast growing areas.

The transaction has been approved by the boards of directors of both companies. The transaction is subject to customary conditions precedent including shareholder approval and applicable regulatory approvals and is expected to close in the first half of 2014, the companies said.

Elder Pharmaceuticals' consolidated net profit tumbled 86.69% to Rs 3.14 crore on 32.76% decline in net sales to Rs 271.68 crore in the quarter ended September 2013 over the quarter ended September 2012.

Elder Pharmaceuticals is an integrated pharmaceutical player, headquartered in 'Mumbai, with a strong presence in the domestic formulation business. The company has 'a strong presence in therapeutic segments such as Women's Healthcare, Pain Management, Wound Care and Neutraceuticals with market leading brands such as Shelcal, Chyrnoral, Eldervit, Formic and Carnisure. The company has six manufacturing facilities for manufacturing formulations and APls and R&D facility located in Nerul (Maharashtra) to provide analytical and development support.

Torrent Pharmaceuticals is the flagship company of the Torrent Group. Torrent has a fully-equipped Research Center, employing almost 600 scientists, to support the company's operations and product pipeline for both domestic and overseas markets. The company's manufacturing plants locatedat lndrad, Baddi & Sikkim have facilities to produce Formulations and Bulk drugs. The plants are approved by authorities from various regulated and semi-regulated markets like US, UK, Brazil, Germany, Australia and South Africa.

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