Aurobindo Pharma opened 2% higher at Rs.800 and went to hit an intraday high at Rs.814, up 4%. It has come off these levels and is now just about holding on to the green at Rs.787, up less than 1%.
The stock reacted to its selling off its subsidiary, Natrol to New Mountain Capital. The all-cash transaction is valued at $550 million or Rs.4048 crore currently.
The transaction is expected to close by January 2021 subject to customary closing conditions and regulatory approvals.
Headquartered in Los Angeles, Natrol has grown to be the #1 natural sleep brand. Natrol’s annual sales for the 12 months ended March 31, 2020 was approximately $157 million.
Proceeds from Natrol’s divestiture will be used to reduce debt and other new strategic initiative.
The company has a debt of around Rs.3200 crore and it has targeted FY22 to become debt free, moving it ahead by one year from FY23.