During Thursday’s trading session, the shares of a global pharmaceutical company headquartered in Bengaluru surged 7.7 percent to Rs. 1,499.9 on BSE, after the company received approval from NCLT for the creation of OneSource, India’s first specialty pharma CDMO.
With a market cap of Rs. 13,737.2 crores, at 02:37 p.m., the shares of Strides Pharma Science Limited were trading in the green at Rs. 1,495.7, up by nearly 7.4 percent, as against its previous closing price of Rs. 1,392.5.
What’s the news:
Strides Pharma Science received approval from the National Company Law Tribunal (NCLT), Mumbai Bench, for its Scheme of Arrangement, which facilitates the creation of OneSource, India’s first specialty pharma Contract Development and Manufacturing Organization (CDMO).
According to the latest regulatory filings with the stock exchanges, the creation of OneSource will combine the specialised businesses of Strides, Steriscience and the high-end biologics CDMO business from OneSource (formerly Stelis Biopharma Limited).
This integration is supported by a recent equity commitment of Rs. 801 crores (~$95 million) from a group of prominent investors, with a pre-money equity valuation of $1.65 billion, positioning OneSource for substantial growth.
With this approval, OneSource will now move forward with plans to list its equity shares on the BSE and NSE, pending the necessary regulatory approvals. As part of the approved Scheme of Arrangement, Strides’ shareholders will receive 1 equity share of OneSource for every 2 equity shares held in Strides (Swap Ratio of 1:2).
Previous News:
On 16th October, Strides Pharma announced that its associate company, OneSource Specialty Pharma Limited, the Group’s Specialty Pharma CDMO, secured confirmed fundraising commitments of Rs. 801 crores from prominent domestic and international institutional investors and family offices in a pre-listing round.
The share subscription agreements are being executed at a pre-money equity valuation of $1.65 billion, which results in an embedded value of Rs. 663 per share for Strides’ holdings in OneSource. This represents an ~82 percent premium over the previous embedded value of Rs. 364 per share, as outlined in the Scheme of Arrangement announced in September 2023.
On 25th September 2023, Strides announced the plans to create OneSource, India’s first specialty pharma pure-play CDMO player by integrating Stelis’ Biologics CDMO, SteriScience’s Complex Injectables, and Strides’ Soft Gelatine businesses into single entity through a Scheme of Arrangement.
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Financials:
The company reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 20.2 percent, rising from Rs. 999 crores in Q2 FY24 to Rs. 1,201 crores in Q2 FY25. Similarly, during the same period, the company’s net profit increased from a loss of Rs. 149 crores to a profit of Rs. 94 crores.
Key Financial Ratios:
In terms of key financial metrics, Strides Pharma Science has a Return on Equity (RoE) of 4.5 percent and a return on capital employed (RoCE) of 7.86 percent. Additionally, the company’s debt-to-equity ratio stands at 1.02.
Stock Performance:
The stock has delivered multibagger returns of nearly 200.7 percent in one year, while around 76.2 percent of positive returns in the last six months. So far in 2024, the shares of Strides Pharma Science have given multibagger returns of about 128 percent.
About the company:
Strides Pharma Science Limited is engaged in the business of the development and manufacture of pharmaceutical products. The company mainly operates in regulated markets and has an “in Africa for Africa” strategy and an institutional business to service donor-funded markets. Its pharmaceutical products are sold in more than 100 countries.
Written by Shivani Singh
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