Strides plunges 12.5% as unit sale to Pfizer seen hitting valuation hurdle

MUMBAI: Shares of mid-cap pharma company Strides Arcolab plunged as much as 17.5% on Thursday on speculation that a potential sale of its injectable medicines unit to Pfizer may get delayed or cancelled over valuation mismatch.

Officials at Pfizer and Strides Arcolab could not be reached till the time of going to press. Strides shares declined to their day’s low of .`865 apiece before recovering to close at .`916.80, down by 12.52%. Nearly 48 lakh shares changed hands on both the exchanges compared to the five-day average volume of 3.6 lakh shares. Last month Bloomberg reported that Pfizer was among the interested pharma companies to buy Agila Specialities, the injectable-medicines division of Strides Arcolab. Its shares have risen almost 91% in the past one year on anticipation of the sale of its unit at a premium valuation. Meanwhile, benchmark indices posted their longest losing streak in 14 months as the government’s advanced GDP numbers for FY13 came in below Street expectations and investors set aside funds to invest in state-owned enterprises in which the government was diluting its stake. The Sensex fell 0.3% to 19580.32 on Thursday, capping six straight days of losses after the CSO pegged economic growth at 5% for FY13, below the RBI’s estimate of 5.5%.