Strides Pharma hits record high after arm gets Rs 801 cr fund commitments

Strides Pharma Science jumped 2.98% to Rs 1612.35 after the firm said that its associate company, OneSource Specialty Pharma received commitment for raising Rs 801 crore ($95 million) from investors, in the pre-listing round.

The fundraise is being led by HBM Healthcare Investments and associated investors, with the additional participation inter alia from WhiteOak Capital, Param Capital, Motilal Oswal, Enam Holdings and SBI Life Insurance Co.

The share subscription agreements are being executed at a pre-money equity value of $1.65 billion, delivering to Strides shareholders an embedded value of Rs 663 per share of Strides holding in OneSource representing an around 82% premium over the previous embedded value of Rs 364 per share as per the scheme of arrangement announced earlier in September23.

Earlier on 25th September 2023, the company announced the creation of OneSource, Indias first specialty pharma pure-play CDMO player by integrating Stelis Biologics CDMO, SteriScience's Complex Injectables, and Strides' Soft Gelatine businesses in a single entity by way of Scheme of Arrangement. As part of the Scheme, Strides shareholders are to receive 1 share of OneSource for every 2 shares of Strides.

OneSource is in the process of seeking final approval for the Scheme from NCLT, Mumbai Bench, to thereafter achieve the listing of equity shares by March25, upon receipt of regulatory approvals.

The company stated in an exchange filing, "Business updates of OneSource and Strides will be part of Q2FY25 earnings reporting scheduled for the later part of October '24."

Arun Kumar, founder of Strides Group, and Neeraj Sharma, CEO of OneSource, said, We are delighted to have received an overwhelming response to the pre-listing fundraise from a marquee set of investors on our cap table prior to our listing. Their strong support is a testament to the confidence they have in our vision and strategic direction. This fundraise will enable us to accelerate our growth plans, right-size our debt book, and commit significant new capex for a strong order book across our 3 platforms.

Badree Komandur, MD & Group CEO of Strides said, We are pleased to have successfully received equity commitments for OneSource, ensuring its future growth. The transaction will unlock around Rs 6,100 crore (approximately $ 725 million) of value for Stridesshareholders. The significant premium that will be achieved from this transaction for Strides shareholders is a testament to our continued value creation for our stakeholders."

Strides Pharma Science is engaged in developing and manufacturing a wide range of IP-led niche Pharmaceutical products.

The company reported a consolidated net profit of Rs 70.20 crore in Q1 FY25 as against a net loss of Rs 7.11 crore posted in Q1 FY24. Revenue from operations stood at Rs 1,087.50 crore in the quarter ended June 2024, registering a growth of 16.93% YoY.

The counter hit an all-time high at Rs 1,651.15 in intraday today.

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