Novartis Divests Majority Stake in Indian Subsidiary to Private Equity Consortium
In a significant strategic move, Swiss pharmaceutical giant Novartis has announced the sale of its entire 70.7% stake in its listed Indian subsidiary, Novartis India, to a consortium of private equity investors led by ChrysCapital. The transaction is valued at approximately Rs 1,446 crore, marking a major shift in the company's operations in the Indian market.
Strategic Review Leads to Divestment Decision
The decision to exit the Indian subsidiary comes after a two-year strategic review initiated by the parent company. Novartis had been assessing its stake in the Mumbai-based firm with the objective of refocusing its efforts on high-value, innovation-led medicines. This move aligns with the company's global strategy to prioritize advanced therapeutic areas.
In a regulatory filing, Novartis confirmed that it has notified the Novartis India board of an agreement with ChrysCapital, WaveRise Investments, and Two Infinity Partners for the transfer of its shareholding. The consortium has also announced a mandatory open offer to acquire an additional 26% of Novartis India at Rs 861 per share, as per regulatory requirements.
Market Reaction and Financial Details
Following the announcement, Novartis India's stock surged by 20%, closing at Rs 997 on the Bombay Stock Exchange (BSE) on Friday. This positive market response underscores investor confidence in the deal and the future prospects of the company under new ownership.
The transaction highlights Novartis's commitment to streamlining its portfolio in India. The firm operates through two entities in the country: the listed Novartis India, which handles legacy products, and the unlisted Novartis Healthcare, which focuses on high-value innovative medicines. Post-divestment, Novartis will retain Novartis Healthcare and expand its portfolio in critical areas such as cardiology, renal, metabolic, and oncology treatments.
Global Leadership Reaffirms Commitment to India
At the Davos 2025 summit, Novartis global CEO Vas Narasimhan reaffirmed that the divestment remains on track. He emphasized the company's ongoing commitment to India's long-term potential, noting that the strategic shift will allow Novartis to concentrate on bringing cutting-edge therapies to the Indian market through its innovative medicines division.
This stake sale represents a pivotal moment in the Indian pharmaceutical landscape, as it transitions ownership of a major legacy player to private equity investors. The move is expected to drive growth and innovation in Novartis India under the new leadership, while enabling the parent company to enhance its focus on advanced medical solutions.
