Natco Pharma set to purchase major shareholding in South African company Adcock Ingram
India’s Natco Pharma has announced a significant investment in South Africa’s 135-year-old pharmaceutical giant, Adcock Ingram. The R 4.2-billion deal will see Adcock Ingram become a privately-held entity co-owned by Natco and Bidvest, with Bidvest remaining the majority shareholder. The acquisition was approved by Adcock Ingram’s shareholders, with over 98% voting in favor of the deal. As a result, Adcock Ingram will be delisted from the Johannesburg Securities Exchange (JSE).
Adcock Ingram is a leading South African pharmaceutical company with a wide range of prescription, over-the-counter, consumer, and hospital products. The company has a long history, dating back to 1890, and has become a household name in South Africa. Despite its success, Adcock Ingram’s performance has been affected by the South African economy, and the company has been seeking ways to expand its presence beyond Southern Africa.
The partnership with Natco is expected to provide Adcock Ingram with access to new markets and revenue streams. Natco’s CEO, Rajeev Nannapaneni, stated that the deal will give Natco a well-established entry into the Southern African market and allow the company to tap into new revenue streams. Adcock Ingram’s CFO, Dorette Neethling, added that the partnership will enable the company to operate more efficiently and commercially, and will provide access to markets beyond Southern Africa.
The acquisition is also expected to benefit Adcock Ingram’s product lineup, with the company ruling out any immediate shake-up. However, the company may consider cutting brands if it makes economic sense. The partnership with Natco is expected to provide Adcock Ingram with the resources and expertise to expand its portfolio, particularly in the generics segment.
The deal has been welcomed by Adcock Ingram’s CEO, Andrew Hall, who stated that the partnership will provide South Africans with wider access to affordable medicines. The acquisition is expected to be completed soon, and will mark a significant milestone for both Natco and Adcock Ingram. With the partnership, Adcock Ingram will be able to leverage Natco’s research-focused and innovative approach to pharmaceuticals, and will be able to expand its presence in the African continent.
Aurobindo Pharma experiences a bearish technical reversal due to its poor performance and stagnant growth.
Aurobindo Pharma, a midcap pharmaceutical company, has recently undergone a change in evaluation, with technical indicators now reflecting a bearish outlook. The company’s technical trend has shifted from mildly bearish to bearish, as indicated by various metrics such as Moving Averages, Bollinger Bands, and MACD. The Moving Averages signal a bearish trend on a daily basis, while the Bollinger Bands also reflect bearish conditions on both weekly and monthly timelines.
The company’s performance over the past year has been underwhelming, with a return of -28.31%, significantly underperforming the broader market, which recorded a slight decline of -2.13%. Aurobindo Pharma’s operating profit growth has been modest, averaging 4.40% annually over the last five years, and recent quarterly results have shown stagnation. Despite these challenges, the company maintains a low debt-to-equity ratio, which is a positive sign.
In terms of valuation, Aurobindo Pharma appears to be reasonably valued, with a return on equity of 10.7 and a price-to-book value of 1.9. These metrics suggest that the company is fairly valued relative to its peers. However, the bearish technical indicators and underwhelming performance over the past year suggest that investors should exercise caution when considering Aurobindo Pharma as a potential investment opportunity.
The company’s struggles over the past year can be attributed to various factors, including increased competition in the pharmaceutical sector and challenges in maintaining profit growth. Despite these challenges, Aurobindo Pharma’s low debt-to-equity ratio and reasonable valuation metrics provide a positive outlook for the company’s long-term prospects. Nevertheless, investors should closely monitor the company’s technical indicators and performance metrics to determine the best course of action.
Overall, Aurobindo Pharma’s bearish technical indicators and underwhelming performance over the past year suggest that the company is facing significant challenges. However, its low debt-to-equity ratio and reasonable valuation metrics provide a positive outlook for the company’s long-term prospects. Investors should exercise caution and closely monitor the company’s performance and technical indicators before making any investment decisions.
The Supreme Court has issued a verdict on Zydus Lifesciences Ltd.’s appeal, the details of which can be found in the official order.
The Appellate Authority for Advance Ruling (AAAR) in Ahmedabad, Gujarat, has upheld a ruling by the Gujarat Authority for Advance Ruling (GAAR) that subscription and redemption of mutual fund units constitute a sale transaction, subject to input tax credit (ITC) reversal. The appeal was filed by Zydus Lifesciences Ltd., a pharmaceutical company that had invested surplus funds in mutual fund schemes and subsequently redeemed them to maintain liquidity.
The company had availed ITC on common inputs and input services used for both taxable supplies and investment activities, but GAAR held that the value of mutual fund transactions must be treated as part of exempt supplies under Section 17(3) of the Central Goods and Services Tax Act, 2017. This meant that the company was required to reverse a proportionate amount of ITC.
The AAAR applied the “common parlance test” to determine that the redemption of mutual fund units amounts to a sale transaction. The bench observed that the law explicitly includes transactions in securities, such as mutual fund units, in the valuation of exempt supplies. The Central Goods and Services Tax Rules, 2017, prescribe that the value of securities shall be taken as one per cent of their sale value for the purpose of ITC reversal.
The AAAR rejected the company’s argument that no mechanism exists for computing the value of redemption for ITC reversal, stating that the rules provide a clear mechanism for computation. The authority also clarified that even if mutual fund investments are considered activities in the course of business, ITC reversal under Section 17(2) read with Section 17(3) remains compulsory.
The AAAR ruled that the company was liable to reverse proportionate ITC on common inputs and input services used in activities relating to the subscription and redemption of mutual fund units. The appeal was dismissed, and the GAAR’s decision was upheld. The ruling has significant implications for businesses that invest in mutual funds and claim ITC on related inputs and services.
The decision is based on the interpretation of Section 17(3) of the Central Goods and Services Tax Act, 2017, which includes transactions in securities within the computation of exempt supplies. The AAAR’s ruling provides clarity on the treatment of mutual fund transactions under the GST law and emphasizes the need for businesses to reverse ITC on related inputs and services. The ruling is expected to have a significant impact on the pharmaceutical and financial services industries, where mutual fund investments are common.
The PHD Chamber of Commerce and Industry’s board has extended a warm welcome to Juneja’s presidency, as well as the leadership of Gupta and Singhania.
The PHD Chamber of Commerce and Industry (PHDCCI) has announced its new leadership team, with Rajeev Juneja taking over as President, succeeding Hemant Jain. Juneja, who is also the Vice Chairman and Managing Director of Mankind Pharma Ltd., brings extensive experience in the pharmaceutical industry to the position. He has outlined his vision for the Chamber, which includes building stronger industry linkages, promoting innovation, and contributing to the vision of Viksit Bharat @2047 through collaborative growth and self-reliance.
Anil Gupta, Chairman and Managing Director of KEI Industries Ltd., has been appointed as Senior Vice President, while Sanjay Singhania, Managing Director and CEO of Epack Prefab Technologies Limited, has taken over as Vice President. Both Gupta and Singhania have expressed their delight at being part of the new leadership team and have pledged to work closely with Juneja and the Chamber’s members to drive impactful initiatives for industry and society.
Hemant Jain, the Immediate Former President, reflected on his tenure, stating that serving as President of PHDCCI has been a deeply fulfilling experience. He expressed confidence that the Chamber will continue to expand its impact under the new leadership. Dr. Ranjeet Mehta, CEO and Secretary General of PHDCCI, welcomed the new team, stating that their combined vision, strategic insight, and commitment to excellence will help the Chamber further strengthen its role as a catalyst for national growth and global competitiveness.
The new leadership team is expected to build on the Chamber’s existing strengths and take it to newer heights. With their extensive experience and expertise, they are well-equipped to drive growth, innovation, and self-reliance in various industries. The PHDCCI is a prominent industry body that plays a crucial role in promoting trade, commerce, and industry in India. The appointment of the new leadership team is expected to further enhance the Chamber’s ability to support the growth and development of Indian businesses.
The vision of the new President, Rajeev Juneja, is aligned with the government’s vision of Viksit Bharat @2047, which aims to make India a developed country by 2047. The Chamber’s focus on building stronger industry linkages, promoting innovation, and contributing to the vision of Viksit Bharat @2047 is expected to have a positive impact on the Indian economy. The new leadership team is committed to working closely with the government, industry stakeholders, and members to drive growth and development in various sectors.
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