Glenmark Pharma To Sell its 82% Stake In Glenmark Life

Glenmark Pharmaceuticals Ltd in India is considering selling a majority of its 82% stake in Glenmark Life Sciences Ltd in order to reduce its debt load, according to the Mint business daily on Tuesday. According to two people familiar with the situation, Glenmark Pharma has hired Kotak Mahindra Capital Co Ltd to oversee the sale of its stake in Glenmark Life and has contacted buyout funds to gauge interest. Glenmark Pharma, Glenmark Life, which manufactures active pharmaceutical ingredients (APIs) for drugs, and Kotak did not respond immediately to requests for comment from sources.

Glenmark Life had a market valuation of 50.13 billion rupees ($611 million) as of the stock's closing price on Monday, which values Glenmark Pharma's stake at 41.1 billion rupees. Glenmark Pharma's net debt was 26.15 billion rupees as of December 2022, up from 21.5 billion rupees the previous year. It has been working to reduce its debt, including the sale of some dermatology brands to Eris LifesciencesERIS.NS in January for 3.40 billion rupees.

Glenmark Pharma considered selling a stake in its API business in 2019, but decided instead to spin off and list Glenmark Life Sciences in 2021. The sale is also necessary because Glenmark Pharma has until August 2024 to reduce its stake to 75% in order to meet Indian regulatory norms on promoter holdings, according to sources. Glenmark Pharma's shares jumped as much as 1.6% to 495.45 rupees, their highest since Feb. 11, 2022. Glenmark Life's shares were down about 1% at 404 rupees in midday trading.