Strides Arcolab tumbles on buzz Mylan deal hits DIPP hurdle

The stock has fallen 19.34% in four trading sessions from Rs 882.85 on 4 July 2013.

Meanwhile, the S&P BSE Sensex was down 111.05 points, or 0.57%, to 19,328.43.

On BSE, 1.40 lakh shares were traded in the counter as against an average daily volume of 52,563 shares in the past one quarter.

The stock hit a high of Rs 789 and a low of Rs 712.10 so far during the day. The stock had hit a record high of Rs 1,224.90 on 5 December 2012. The stock had hit a 52-week low of Rs 675.25 on 27 July 2012.

The stock had underperformed the market over the past one month till 9 July 2013, sliding 10.15% compared with the Sensex's 0.05% rise. The scrip had also underperformed the market in past one quarter, falling 5.40% as against Sensex's 6.66% rise.

The mid-cap company has an equity capital of Rs 59.05 crore. Face value per share is Rs 10.

According to media reports, the Department of Industrial Policy and Promotion (DIPP) has put on hold US-based Mylan Inc's plan to acquire Agila Specialties, the injectable division of Strides Arcolab.

The DIPP, the government body that makes FDI (foreign direct investment) policy, raised fears that foreign multinational firms were taking over the few remaining domestic cancer drug-making facilities. The Foreign Investment Promotion Board (FIPB) has reportedly deferred a decision on the deal.

On 28 February this year, Strides Arcolab and the US-based Mylan Inc signed a massive $1.6 billion plus agreement by which the US drug major was to acquire Agila Specialties.

Strides Arcolab's board recently approved increasing the limit of investments by Foreign Institutional Investors (FIIs) in the equity share capital of the company from 49% to 74%, subject to approval of the members, Reserve Bank of India and any other approvals as may be required.

Strides Arcolab reported net profit of Rs 31.57 crore in Q1 March 2013, as against net loss of Rs 28.16 crore in Q1 March 2012. Net sales rose 34% to 161.34 crore in Q1 March 2013 over Q1 March 2012.

Strides Arcolab is a global pharmaceutical company headquartered in Bangalore. The company develops and manufactures a wide range of IP-led niche pharmaceutical products with an emphasis on sterile injectables.

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