Novartis India Promoter Stake Sale Triggers ₹552 Cr Open Offer

Novartis India Ltd is in the spotlight after its promoter, Novartis AG, agreed to sell its entire 70.68% stake in the company to a group of new investors. This transaction automatically triggers a mandatory open offer to public shareholders under Indian securities regulations, allowing them to tender their shares at a specified price.

The promoter stake sale involves 1,74,50,680 equity shares, representing a controlling interest in the company. The acquisition consortium includes WaveRise Investments, ChrysCapital Fund X, and Two Infinity Partners, who will collectively acquire the promoter’s stake. To facilitate the deal, Novartis India’s board has executed a company covenant and warranty deed with the seller and acquirers. As part of this transaction, Novartis India has agreed to remove all references to the selling promoter group from its name within 120 days after the deal closes. The company will also support the acquirers with all necessary information for completing the mandatory open offer process.

As per Indian takeover regulations, any acquisition crossing the 25% ownership threshold requires a mandatory offer to existing public shareholders. Accordingly, the consortium will offer to buy up to 64,19,608 fully paid-up equity shares, representing 26% of Novartis India’s voting share capital. The open offer price is ₹860.64 per share, payable in cash, which translates to a total consideration of approximately ₹552.49 crore.

This price represents a 3.64% premium over Novartis India’s closing price of ₹830.45 the previous day, a common practice in open offers designed to incentivize shareholders to tender their shares rather than retain them.

The promoter exit and stake sale mark a major shift in Novartis India’s ownership and control, signaling the entry of a new investor consortium with potential plans for strategic or operational changes. The mandatory open offer provides public shareholders an opportunity to exit at a premium price while aligning with regulatory requirements. Additionally, the upcoming company rebranding underscores the transition away from Novartis AG’s influence.

For investors, the open offer presents a clear exit option at an attractive price. The deal’s closure and subsequent rebranding will be closely watched for indications on strategic direction, potential partnerships, or expansion plans under the new ownership.