Glenmark Pharma gains after CCEA approves hike in FII investments limit

Glenmark Pharmaceutical rose 6.11% to Rs 896 at 9:35 IST on BSE after the Cabinet Committee on Economic Affairs approved raising foreign investment limit in the company to 49% from 35.07%.

Meanwhile, the BSE Sensex was up 147.47 points, or 0.52%, to 28,664.06.

On BSE, so far 1.30 lakh shares were traded in the counter, compared with an average volume of 77,367 shares in the past one quarter.

The stock hit a high of Rs 897.90 and a low of Rs 871.15 so far during the day. The stock hit a 52-week high of Rs 892 on 8 April 2015. The stock hit a 52-week low of Rs 510 on 19 May 2014.

The stock had outperformed the market over the past one month till 7 April 2015, rising 1.62% compared with 3.17% decline in the Sensex. The scrip had also outperformed the market in past one quarter, rising 17.50% as against Sensex's 5.97% rise.

The large-cap company has an equity capital of Rs 27.13 crore. Face value per share is Re 1.

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, yesterday, 7 April 2015, approved raising the foreign investment limit in Glenmark Pharmaceutical by foreign institutional investors (FIIs) from 35.07% to 49%. This will result in an inflow of about Rs 2022 crore.

Meanwhile, Glenmark Pharmaceuticals announced before trading hours today, 8 April 2015, that its subsidiary, Glenmark Generics Inc., USA has concluded the pricing investigation by the Texas Attorney General, USA. Under the terms of the agreed settlement, there is no admission of liability. Glenmark Generics will make a payment in 16 equal payments of $1.56 million each quarter for the next 16 quarters to the state of texas.

The settlement amount will not materially impact the organization's cashflow, said Robert Matsuk, President, North America and Global API Business, Glenmark.

Under the settlement agreement, Glenmark must pay the State of Texas a total of $11.25 million for the State's general revenue fund. Because the Medicaid program is jointly funded by the State and US taxpayers, the federal government is entitled to a percentage of the settlement proceeds. The federal government's share is also $11.25 million. Additionally, the Texas Attorney General's Office will receive $2.5 million in attorneys' fees and costs, the company said in a statement.

Glenmark Pharmaceuticals' consolidated net profit fell 46.9% to Rs 114.77 crore on 6% rise in total income to Rs 1703.43 crore in Q3 December 2014 over Q3 December 2013.

Glenmark Pharmaceuticals has a significant presence in branded generics markets across emerging economies including India.

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