Torrent Pharma To Raise up to $297 Million via Block Deal

Torrent Pharmaceuticals is eyeing a big-ticket fundraising of around $297 million (about Rs.2,496.9 crore) through a block deal scheduled for October 30, 2024. Torrent’s promoter, Torrent Investments Pvt. Ltd., plans to sell around 8.3 million shares at a 6% discount, pricing each at Rs.3,022.71. The deal’s base is pegged at Rs.2,500 crore but includes a “greenshoe” option to boost it by Rs.500 crore if the demand is high.

Q2 Numbers Add to the Buzz

Torrent Pharma’s Q2 results came in strong, drawing plenty of attention. Torrent Pharma reported a net profit of Rs.453 crore, a 17% jump from last year’s Rs.386 crore. Revenue saw an 8.6% boost to Rs.2,889 crore, driven by a 13% rise in domestic revenue to Rs.1,632 crore, largely thanks to standout performance in focus therapies. EBITDA also climbed 14% to Rs.939 crore, with margins expanding to 32.5% from last year’s 31%.

Market Reacts to the Block Deal

Shares of Torrent Pharma took a bit of a hit post-announcement, dropping by as much as 4% to around Rs.3,136.20 on the NSE by mid-morning. Despite this dip, the stock has had a stellar run this year, clocking in gains of over 38% since January and up 66.58% over the past 12 months. The block deal triggered a surge in trading, with 1.04 crore shares changing hands, way above the daily average.

Analysts Are Split

Among the 33 analysts covering Torrent Pharma, 20 suggest a “buy,” while eight recommend holding and five say “sell.” The consensus 12-month target price suggests a 10.5% potential upside, hinting at a generally positive sentiment in the long term.

Conclusion: Torrent Pharma’s block deal will help cash in on investor interest following its robust quarterly results. While the short-term stock dip might make headlines, the deal’s 120-day lock-up could stabilize things, giving existing investors time to gauge the full impact. With a strong foundation and positive analyst sentiment, Torrent is positioning itself to keep the momentum going

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.