The stock price has increased by 88.55% in last one year, while the benchmark index S&P BSE Sensex has increased by 40.80%.
The stock rallied after it announced that it is going to acquire the Active Pharmaceutical Ingredient (API) business of Ind Swift Laboratories Ltd.
PI Industries Limited has signed a Business Transfer Agreement (BTA) with Ind-Swift Laboratories Limited (ISLL) to acquire their API and Intermediates business on a slump sale going concern basis.
In the regulatory filing, PI Industries stated that it intends to create a differentiated position in the pharmaceutical sector by leveraging its core competencies in complex chemistry, operational excellence, technology platforms, and global reach through collaboration with large innovators.
Subject to closing adjustments, the total purchase consideration for the target undertaking is expected to be INR 1530 crores on a debt and cash free basis.
The purchase consideration will be paid in cash and will be funded by the proceeds of the completed Qualified Institutional Placement (QIP) as well as internal accruals. With immediate effect, the transaction is expected to be earnings accretive.
The transaction includes the entire API Undertaking, which includes two manufacturing plants in Dera Bassi, Punjab, and Jammu and Kashmir, as well as R&D in Mohali, Punjab, with a strong product pipeline, customer and vendor contracts, and sales, marketing, and distribution networks spanning more than 70 countries and serving more than 200 global customers.
The transaction and integration into PI’s corporate structure are expected to be completed during Q3FY22, subject to customary closing conditions and regulatory approvals, according to the company.
In Q1 June 2021 (Q1 FY22), PI Industries’ consolidated net profit increased 28.7 percent to Rs 187.20 crore on a 12.6 percent increase in net sales to Rs 1,193.80 crore compared to Q1 June 2020. (Q1 FY21).
Incorporated in 1947, PI Industries is a company that specializes in agricultural inputs, fine chemicals, and (CRAMS) Contract Research and Manufacturing Services, polymers, and engineering services.
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