Swiss drugmaker Novartis AG has announced a strategic review of Novartis India Limited, a public company listed on the Bombay Stock Exchange.

The strategic review will include an assessment of the 70.68 per cent shareholding of Novartis AG in the company, the company said late Friday. The multinational presently has Vasant (Vas) Narasimhan as its Chief Executive Officer.

Novartis India Limited is separate from Novartis Healthcare Private Limited, the subsidiary of the Novartis group in India. Novartis Healthcare Private Limited includes the Novartis Corporate Center in Hyderabad, the commercial arm of Novartis in India, and research and development teams, which currently conduct clinical trials at more than 300 trial sites in the country. The strategic review will not impact Novartis Healthcare Private Limited, it added.

 “There can be no assurance that the strategic review of Novartis India Limited will be completed in 2024, or that the outcome would result in the implementation of any transaction,” the note said.

Local interest?

The company recently entered a two-pronged tie-up with JB Chemicals for Novartis’ ophthalmology brands.

Meanwhile, reports suggested that Dr Reddy’s Laboratories had evinced interest in picking up the parent company’s stake in NIL. In its response, DRL told the BSE that it did not comment on “market speculations” and that “there is currently no such event or information which requires a disclosure”.

Novartis said it remained “ deeply committed” to India with a footprint that has expanded significantly in recent years. Today, Novartis employs more than 8,100 associates in India. Although the announcement came after market hours on Friday, the company’s shares had closed up 13.55 per cent on the BSE at Rs 1035.45.

Buyback

This is not the first time Novartis has been in the spotlight involving its India operations. In 2018, the company announced a buyback, where it then said it was looking “to buy back up to 3,820,000 equity shares of ₹5 each, representing 11.95 per cent of the total paid-up equity capital from all its existing equity shareholders through the tender offer route.” Novartis was to fork out ₹290 crore for the exercise.

The company had also stated the intention of the promoter to participate in the proposed buyback. The parent company, Novartis AG, held 75 per cent of the Indian entity.

With no explanation then either on what triggered the decision or the reason behind its timing, market-watchers pointed to a possible delisting plan from the Indian market.

In the latest announcement on the review of the Indian operations, the company did not specify the reasons behind the decision or its timing.

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