Crisil reaffirms 'A1+' rating on Ranbaxy's bank facilities

Rating agency Crisil has reaffirmed its 'A1+' rating on bank facilities of Ranbaxy Laboratories post Sun Pharmaceutical Industries's announcement to acquire 100 per cent stake in it.
The deal is valued at an enterprise value of USD 4 billion on an all-stock transaction. Under the agreement, Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each share of Ranbaxy.
"The ratings continue to reflect Ranbaxy's established position in the international generics market and in the Indian formulations market. The rating also factors in the business synergies with its parent, Daiichi Sankyo Company Ltd (Daiichi), one of the leading innovator pharmaceutical companies in Japan.

"These rating strengths are partially offset by Ranbaxy's exposure to growing competition and regulatory risks in the regulated generics markets of USA and Europe, and susceptibility to fluctuations in foreign currency exchange rates on option contracts," Crisil said in its report.
Ranbaxy, being one of the top 10 generics companies in the world, has first-to-file (FTF) status on blockbuster products such as Nexium (sales of around USD 6 billion for 2012) and Diovan (around USD 2 billion), among others.
Crisil estimates that the overall US generic market opportunity from exclusivity products for Ranbaxy will be more than Rs 1,500 crore till 2015.

The rating agency further said it believes that Ranbaxy will remain a strong player in the domestic formulations market, supported by its established brands, a large therapeutic-focused field force, access to the parent's portfolio, and new product launches.