Cipla Ltd.

The promoters of Cipla, India’s second-largest drug maker by sales are in negotiations to sell their stake to a global buyer. They have appointed Kotak Investment Bank and may conclude a deal sometime this year. Cipla’s talks with Germany-based Merck seem to be most advanced.

Cipla, with over 5% market share, makes a good fit for any company looking for a sweet spot in the Indian pharma market. With shareholders of multinational companies urging them to expand in India, and relatively few sellers here, buyers have been paying a handsome premium for available assets.

The promoter stake in the company is likely to be valued around 8,000 crore. If the promoter shares change hand, investors can expect an open offer to other shareholders under Indian regulations. Cipla has immense export potential to semi-regulated markets. It also has a very strong product portfolio in the respiratory segment