AstraZeneca tanks on lower stake-sale price

R. Yegya Narayanan Coimbatore | Updated on May 28, 2013 Published on May 28, 2013

But promoter gets bids 4.75 times the offer-for-sale

Shares of AstraZeneca Pharma India Ltd (APIL) took a pounding on Tuesday, losing about 18 per cent of value after its parent company fixed an offer-for-sale (OFS) price that was far below the market price of the stock.

But the stake-sale by the promoters received a tumultuous response at the bourse. As against the offer of 37.5 lakh shares, it received bids for 1.82 crore shares.

The OFS took place on Tuesday to comply with SEBI regulation on minimum public shareholding of 25 per cent.

The extent of investor loss in the counter could be gauged from the fact that the stock has shed more than two thirds of its value in the last one year after hitting a 52-week high of Rs 2,023 in May 2012. APIL’s parent company AstraZeneca Pharmaceuticals AB Sweden had late on Monday announced an OFS price of Rs 490 a share for the stake sale through the stock exchange mechanism on Tuesday.

Sheds 15% in 1st hour

The stock, which had closed on Monday on the NSE at Rs 805.30, was pummelled once trading began, losing Rs 120.90 or 15.01 per cent within the first 45 minutes. At the day’s close, the stock had lost Rs 145.30 or 18.04 per cent to end at Rs 660 with about 20.66 lakh shares being traded on the NSE.

APIL had on March 6, 2012, clarified that it had “received no communication whatsoever from overseas promoter shareholder, namely, AstraZeneca Pharmaceuticals AB, Sweden, on the subject of delisting of the shares of this company.” The stock began losing steam after the company’s financial performance started slipping. During 2012-13, APIL saw its net sales decline sharply to Rs 390.25 crore compared to Rs 531.27 crore in 2011-12. It reported a net loss of Rs 89.53 crore as against a net profit of Rs 19.76 crore in the earlier fiscal. The company skipped paying dividend last year “in view of absence of profits for the year ended March 31, 2013, and to conserve resources for future growth.”

Explaining the reasons for the poor show during 2012-13, APIL said at the end of FY 2011-12, the factory had experienced interruptions in the supply of certain products. The company had invested and continued to invest, to remedy them because of which it had succeeded in gradually returning a majority of products to the market. These interruptions had impacted the company’s revenue in 2012-13, APIL said.

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Published on May 28, 2013
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