Dear Members,

We have released 13th Oct’23: Special situation opportunity on the proposed open offer and promoter change in Glenmark Lifesciences. The same has also been produced below. For details and other updates, please log into the website at the following link –

Note: For any queries, mail us at [email protected]

Date: 13th Oct’23

CMP – 650.00 (BSE); 650.25 (NSE)

Rating – Positive – 4% weightage; this is not an investment advice (refer rating interpretation at the end)


Glenmark Lifesciences (NSE – GLS)

Glenmark Lifesciences (GLS) is currently a subsidiary of Glenmark Pharmaceuticals Ltd (GPL) wherein GPL holds 82.67% stake in GLS.

GLS manufactures Generic APIs in therapy areas such as cardiovascular, central nervous system, pain management and diabetes. The company also provides CDMO services to a range of multinational and specialty pharmaceutical companies.

Generic APIs accounted for 92% of the sales of the company in FY 23 and the rest came from CDMO.

In terms of geographical mix, regulated markets account for 75% + sales of the company and the remaining comes from emerging markets.


Proposed change in ownership

As mentioned above, GPL is the current promoter of the company with 82.67% stake.

On 21st Sep’23, the company informed the exchanges that GPL has entered into a definitive agreement with Nirma Ltd for sale of its 74.84% stake in GLS at Rs 615/- per share.

Post transaction, GPL would be left with 7.83% stake in the company.

Further, because of share purchase agreement, Nirma has announced a mandatory open offer to acquire 17.33% stake in the company from the public shareholders at Rs 631.20/- per share.

The open offer includes the entire public shareholding in the company.


Rationale for the opportunity

We see this open offer and ownership change opportunity in GLS as the one with a known low downside and an unknown upside.

The rationale is as follows:

  • The tentative schedule for the tendering period is 16th-30th Nov’23. As the open offer is for the entire public shareholding, at least during the tendering period one can tender shares at Rs 631.20/- with 100% acceptance and limit the downside in case of a fall.
  • A lot of times new promoters bring in renewed focus and energy to distressed or slow growth companies resulting in stronger growth and re-rating.


Particulars (in cr.) FY 19 FY 20 FY 21 FY 22 FY 23 TTM
Sales 886 1537 1885 2123 2161 2250
Operating profit 248 473 592 617 643 689
Operating Profit % 28% 31% 31% 29% 30% 31%
PBT 228 421 471 565 629 664
PAT 196 313 352 419 467 494

Source: Screener

  • Operationally, GLS has been performing well, is debt free with surplus cash of around Rs 300 crore + at the end of Jun’23 and the management has guided mid-teens growth with stable margins in FY 24.
  • The valuations of the company seem reasonable at around 16 times trailing 12 months earnings.

The company has announced an interim dividend of Rs 22.50/- per share with 17th Oct’23 as the ex-date.

Since mid of Jul’23, the stock has been consolidating in the 600-650 odd range. As mentioned above, we see it as a low downside opportunity with an unknown upside.

However, to limit the downside, we will consider closing the opportunity in case of a fall below 600 odd levels (post the closure of the tendering period).



Over the past few months there’s been a significant rise in small cap index and small cap stocks. In case of a major correction, stocks across the board will get de-rated and can impact the valuations of Glenmark Lifesciences.

Acquirers have the right to withdraw the offer in case the statutory approvals are refused or the terms of conditions of the SPA are not met.

US-FDA audit for the company’s plants is due. In case of an adverse outcome, company’s sales and profits might get impacted.


Disclosure: I do not have any holding in Glenmark Lifesciences.


Best Regards,

Ekansh Mittal
Research Analyst
Ph.: +91-727-5050062, Mob: +91-9818866676
Email: [email protected]


Rating Interpretation

Positive – Expected return of ~15% + on annualized basis in medium to long term for investment recommendations and in short term for Special situations
Neutral – Expected Absolute return in the range of +/- 15%
Negative – Expected Absolute return of over -15%
Coverage closure – No further update on the stock
% weightage – allocation in the subject stock with respect to equity investments

Short term – Less than 1 year
Medium term – Greater than 1 year and less than 3 years
Long term – Greater than 3 years


Research Analyst Details

Name: Ekansh Mittal     Email Id: [email protected]    Ph: +91 727 5050062

Analyst ownership of the stock: No

Details of Associates: Not Applicable

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