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Chennai-based Orchid Pharma has met SEBI’s minimum public shareholding norms after its latest fundraising through a qualified institutional placement (QIP) has brought promoter Dhanuka Laboratories’ stake below 75 per cent.
As per latest shareholding data, the promoter shareholding in the company has reduced to 72.40 per cent at the end of June quarter as against 89.96 per cent at the end of March 2023 quarter.
Background
In 2019, Gurgaon-based Dhanuka Laboratories won a corporate insolvency resolution plan to take over the debt-ridden Orchid Pharma. Accordingly, Dhanuka took full control of Orchid Pharma in April 2020 and relisted the share on stock exchanges. As per market regulator’s minimum public shareholding (MPS) norms, companies are required to have a public shareholding of at least 25 per cent within three years of listing.
In 2021, the promoters made an offer for sale (OFS) representing 8.04 per cent of equity shareholding in the company, bringing down their stake from 98 per cent to 89.96 per cent.
- Also Read: Orchid Pharma shares hit fresh high after signing tech transfer pact for cephalosporin intermediate
In December 2022, Orchid Pharma’ board approved raising of ₹500 crore through a QIP and appointed investment banks Edelweiss Financial and JM Financial, to handle the share sale. However, the QIP process could not go through and as a result the company failed to meet the MPS norms before the March 2023 deadline.
In May, stock exchanges froze the shares of its promoters for the company’s failure to comply with MPS norms within the stipulated time period.
QIP Process
Meanwhile, the company raised ₹400 crore through QIP issuance at the end of June, which saw the participation of investors like Massachusetts Institute of Technology, Quant Mutual Fund and Societe Generale.
Post the QIP issue, the public shareholding of the company increased to 27.60 per cent at the end of June 2023 quarter from 10.04 per cent as of March 2023 quarter. Within public shareholding, Mutual Funds hold 9.78 per cent stake in Orchid Pharma followed by foreign portfolio investors (8.58 per cent) while the remaining 9.24 per cent stake is held by domestic corporates and retail investors.
- Also Read: Orchid Pharma raises ₹400-crore in QIP issue
However, it is still unclear whether stock exchanges have lifted the freeze on promoters after the company met the MPS norms.
Stocks of Orchid Pharma were down by four per cent to Thursday to close at ₹590 on NSE.
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