Sun Pharma share price dives as Daiichi Sankyo says sayonara

The Japanese drug major had received the Sun Pharma shares following the acquisition of Ranbaxy, which it owned, by Sun Pharmaceuticals early last year.

Sun Pharma shares closed at Rs. 955.65, a loss of Rs. 88.15 or 8.45 per cent on the NSE . What hurt the share price was that the sale was effected in block deals at a significant discount to the market price of the stock, leading to the crashing of the share price. This may be hurting the existing investors in the stock, which had shed nearly 20 per cent of its value after hitting a new 52 week high of Rs. 1,200.80 on the exchange only three weeks back. In fact, nearly 50 per cent of the 20 per cent erosion in stock value had happened in a single day today.

The counter witnessed a huge trading volume of 26.57 crore shares on the NSE and the value of trading was a whopping Rs. 24,817. 52 crore, catapulting Sun Pharma to the top of the chart in terms of both volume and value of shares traded on the NSE. Daiichi held 21.49 crore shares in Sun Pharma. It is not that Daiichi would be making a profit in the sale of its stake in Sun Pharma in view of the fact that it had purchased Ranbaxy for $4.6 billion from the Singh brothers whereas its sale of Sun Pharma shares would have fetched it, depending on the sale price, close to $3.5 billion, as it says “sayonara” (goodbye or farewell in Japanese) to Indian markets.

But with the share price of Sun Pharma more than doubling in the last one year, from its low of Rs. 572 on May 22, 2014 to its current levels, Daiichi would have been able to trim its losses from its acquisition of Ranbaxy because of better price realisation from stake sale in Sun Pharma.

However, Sun Pharma shares, which had touched a new 52 week high of Rs. 1200.80 on the NSE on April 7, had lost some of the gains made ahead of the stake sale announcement because of the general weakness in the market over the FII tax issue.
Business Line.