Lupin to sell trade generics business in India to Lupin Life Sciences for ₹100-120 crore
Pharma major Lupin Ltd on Friday (March 22) said the company is planning to carve out its trade generics business in India and transfer it to Lupin Life Sciences Ltd (LLSL), a wholly-owned subsidiary of the company, for ₹100-120 crore.
‘As approved by the Board of Directors of Lupin Limited (the company), at its meeting held today i.e. March 22, 2024, the company plans to carve out, its trade generics business in India, as a going concern, on a slump sale basis, to Lupin Life Sciences Limited (LLSL), wholly owned subsidiary of the company,” Lupin said in a stock exchange filing.
The trade generics business to be transferred includes all related assets and liabilities, such as movable assets, products, employees, contracts (including lease deeds), intellectual property, licences, permits, consents, approvals, transferable tax credits, trade receivables, inventory, trade payables, and insurance policies.
The trade generics business had revenues of approximately ₹277.7 crore in FY23, contributing 2.5% to Lupin’s standalone turnover for the year ended March 31, 2023. The net worth of the business as of March 31, 2023, stood at about ₹72.1 crore.
The business transfer agreement (BTA) between Lupin and LLSL is expected to be finalised in Q1 of FY25. The ₹100-120-crore slump sale is subject to the satisfactory completion of conditions precedent, including securing requisite approvals, and is expected to be completed by the end of business hours on June 30, 2024, or a date agreed upon by both parties.
A slump sale involves transferring a part or whole of a business to another firm for a lump sum amount.
LLSL, the buyer, was incorporated on July 17, 2023, and does not belong to the promoter/promoter group/group companies of Lupin. As the transaction is between the holding company and its wholly-owned subsidiary, the entire economic value of LLSL will remain with Lupin, making the arm’s length principle irrelevant.
The rationale behind the slump sale includes achieving agility, better focus, and growth for the trade generics business.
Lupin plans to increase its business by investing in new launches and penetrating underserved markets. The company believes that trade generics are poised for higher growth due to the increasing need for accessibility, availability, and affordability of medicines.
Shares of Lupin Ltd ended at ₹1,608.50, down by ₹3.70, or 0.23%, on the BSE.
