Glenmark Pharma to sell 7.8% stake in Glenmark Life Sciences via OFS; both stocks trades in red

Glenmark Pharmaceuticals Ltd. will exit the company by divesting its remaining stake in Glenmark Life Sciences Ltd. through the offer-for-sale (OFS) route.

In a notification to the stock exchanges on Wednesday, July 10, the company said that its board has approved an OFS of equity shares of the face value of ₹2 each of Glenmark Life Sciences by Glenmark Pharma and Glenn Mario Saldanha through the stock exchange mechanism.

The company proposes to sell up to 96.17 lakh equity shares of Glenmark Life Sciences, representing 7.85% equity, on July 11 for non-retail investors and on July 12 for retail investors.

The floor price for the OFS will be ₹810 per equity share. This is 7.5% lower than Glenmark Life Sciences’ previous close of ₹875.85 on Wednesday on the National Stock Exchange of India (NSE).

Consequently, the Glenmark Life Sciences stock dropped as much as 3.6% on Thursday to hit an intraday low of ₹844.20 on NSE. Meanwhile, Glenmark Pharma shares hit 52-week high of ₹1,393.65 on NSE, but trades in red around ₹1,371 as of 1:30 pm.

Elaborating more on the OFS, Glenmark Pharma said that the sellers are undertaking the offer to achieve the company's minimum public shareholding as prescribed by the Securities and Exchange Board of India.

The allocation will be at or above the floor price on a price priority basis at multiple clearing prices per the OFS guidelines, except for retail investors, who will have the option to bid at the cut-off price.

A minimum of 25% of the offer shares will be reserved for mutual funds and insurance companies, subject to receipt of valid bids at or above the floor price.

In the event of any undersubscription by mutual funds and insurance companies, the unsubscribed portion will be available to other bidders in the non-retail category.