Strides Pharma Science shares in focus today; here's why

Shares of Strides Pharma Science Ltd are in focus on Wednesday morning after the drugmaker said its associate company, OneSource Specialty Pharma, has received confirmed commitments for fundraising of Rs 801 crore or $95 million from marquee domestic and foreign institutional investors and family offices, in the pre-listing round.

The share subscription agreements are being executed at a pre-money equity value of $1.65 billion, delivering to Strides’ shareholders an embedded value of Rs 663 per share of Strides’ holding in OneSource, representing an 82 per cent premium over the previous embedded value of Rs 364 per share, as per the Scheme of Arrangement announced earlier in September 2023.

The fundraise will enable Strides Pharma to accelerate growth plans, right-size debt book, and commit significant new capex for a strong order book across 3 platforms, the company said.

"The transaction will unlock Rs 6,100 crore ($725 million) of value for Strides’ shareholders. The significant premium that will be achieved from this transaction for Strides’ shareholders is a testament to our continued value creation for our stakeholders," MD & Group CEO Badree Komandur said.

The drugmaker said the strong interest from leading investors reflects growing confidence in its capabilities and the potential of the CDMO sector emerging out of India. "This fundraise is in line with the Scheme of Arrangement announced in September’23 and the investment is subject to customary closing conditions, including receipt of necessary regulatory approvals," Strides Pharma said.

To recall, Strides Pharma had announced the creation of OneSource, India’s first specialty pharma pure-play CDMO player by integrating Stelis’ Biologics CDMO, SteriScience's Complex Injectables, and Strides' Soft Gelatine businesses in a single entity by way of Scheme of Arrangement.

As part of the Scheme, Strides shareholders are to receive one share of OneSource for every two shares of Strides.

OneSource is in the process of seeking final approval for the Scheme from NCLT, Mumbai Bench, to thereafter achieve the listing of equity shares by March 2025, upon receipt of regulatory approvals.