Sun Pharma closes share buyback offer period; stock jumps 5%
Shares of Sun Pharma Industries moved higher by 5 per cent to Rs 512 on the BSE on Monday after the company announced the closure of buyback of equity shares of the company on Friday, September 25, 2020. The pharmaceutical company has not purchased any shares under buyback offer as the market price was higher than the buyback price.
“No equity shares have been bought back under the buyback as the volume-weighted average market price of equity shares of the company during the buyback period was higher than the maximum buyback price,” Sun Pharma said in a post-market hours-exchange filing on Friday.
In March 2020, Sun Pharma had launched a buyback offer to buy back 40 million shares at a price up to Rs 425 per equity share, totalling to about Rs 1,700 crore through open market route.
In the past month, the stock underperformed the market and fell 8 per cent, as compared to a 5 per cent decline in the S&P BSE Sensex till Friday.
In another development, drug major Sun Pharma is looking to expand its specialty business across different regions like Greater China and Japan after having established presence in the US market, as per the company’s Annual Report for 2019-20.
Sharing information with shareholders, Sun Pharmaceutical Industries Managing Director Dilip Shanghvi said the company’s strategy of developing the specialty business as an additional growth engine has started delivering results, with a gradual ramp-up in specialty revenues, news agency PTI reported.
The management expects this momentum to continue over the next few years even as the Covid-19 pandemic and lockdowns may throw up some uncertainties in the near-term. The specialty business is also helping the company to move up the pharmaceutical value chain and bring in more innovation to its business.
“Sun expects some specialty products to achieve breakeven by FY22e. We believe traction in Ilumya is key to drive operating leverage and margin expansion. The product’s advantage (lower dosing frequency, better safety profile) over peers should prove to be beneficial in the longer term. Contribution from US and non-US markets will be keenly monitored,” analysts at HDFC Securities said in June quarter results update.
At 02:40 pm, Sun Pharma was trading 4 per cent higher at Rs 508 on the BSE, as compared to a 1.5 per cent rise in the S&P BSE Sensex. A combined 10.5 million equity shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.
