Natco hits peak on stake buy by CX Securities

MUMBAI: Shares of Hyderabad-based Natco Pharma scaled an all-time high on Monday after the drug maker informed the BSE that foreign institutional investor CX Securities has bought close to 7% stake in the company for Rs 153.22 crore.

The stock gained 1.08% to touch Rs 728 intra-day on the BSE, but shed the gains later to close down 1.86% at Rs 699.05.

Analysts said CX Securities' decision to buy stake in Natco reaffirms the attractive valuations that drug companies carry in India. In a statement, Natco said it will issue 24 lakh shares to CX Securities for Rs 638.40 a piece. The company said its board has also approved raising of the foreign institutional investor limit in the company to 49% of the paid-up capital. Currently, FIIs hold close to 8% stake in the company.

"We will use the fund for general corporate purposes and to service our debt," N Adinarayan, company secretary at Natco Pharma, said in the statement.

In the last one year, Natco has had some positive run in the business on the back of robust sales from its export business.