Convergent Finance to acquire a controlling stake in Jagsonpal Pharma.

Wednesday February 23, 2022 at 3:46 pm

Indian pharmaceutical industry has attracted a great deal of attention from investors after its excellent work in fighting the Cvodi-19 pandemic and its growth in the past few years. The country is already a major global player in the industry and is now attracting additional investments.

The funds managed by Infinity Investment Management with advice by Convergent Finance LLP (Limited Liability Partnership) have claimed the execution of an agreement with its existing promoter shareholders of Jagsonpal Pharmaceuticals under which it will acquire approximately 43.7 percent of the outstanding shares of Jagsonpal Pharmaceuticals at a price of two hundred and thirty-five Indian national rupees per share for a total consideration of Rs. 2,692 million or Rs. 269.2 crore. That’s approximately 36 million US dollars.

Jagsonpal Pharmaceuticals’ shares are listed on the Bombay Stock Exchange and National Stock Exchange (NSE). The proposed transaction will mean that a mandatory open offer for an additional 26% of the outstanding shares must be triggered in accordance with applicable regulations of the Securities and Exchange Board of India (SEBI). As per the rules of the Securities and Exchange Board of India (SEBI), this open offer will avail the shares of the company to the public at large and small investors can invest in the company through the Bombay Stock Exchange and National Stock Exchange (NSE).

The transaction is, of course, subject to precedent conditions, including the completion of the open offer. The acquisition and the open offer are estimated to close during the quarter ending in June 2022.

Jagsonpal Pharmaceuticals was founded nearly 58 years ago, in 1964, by a renowned entrepreneur in the industry, Mr. Jagmohan Singh Kochhar. It has grown to be a leading pharmaceutical company in the business of domestic formulations. 

Jagsonpal Pharmaceuticals has been publicly listed since 1986. Historically Jagsonpal Pharmaceuticals’ key strength has been the discovery of effective novel formulations by leveraging Mr. Rajpal Singh Kochhar and his team’s deep scientific expertise. Jagsonpal Pharmaceuticals’ product range is focused primarily on products related to women’s health and orthopedics.

Mr. Rajpal Singh Kochhar is the chairman & managing director of Jagsonpal Pharmaceuticals. He stated, “We are impressed by the Convergent Funds’ partnership model and track record of value creation through operational improvements and efficient capital allocation. This will greatly benefit the company and its stakeholders. Going forward, while the Convergent Funds will work extensively with company management in building the business. We will support the business with our legacy knowledge, pharmaceutical expertise, and industry connects.”

Harsha Raghavan, the managing partner of Convergent, said, “Jagsonpal is a well-established company in the Indian domestic formulations industry with a strong portfolio of brands. Women’s health is a critical issue for our nation, and Jagsonpal plays an important role in making its products accessible to the masses. The company has a robust distribution network and large field force of medical representatives,”

The transaction might increase the force of efforts being made to improve women’s health, a much-ignored issue in India. The issue has recently gained renewed attention with feminist moments in the country. However, the health of women in masses, particularly that of homemakers, remains a low priority issue. They are the worst hit victims when a family grows poor. Affordability and accessibility of quality care are significant issues in this regard in a developing country like India, and the businesses like Jagsonpal Pharmaceuticals are dedicated to resolving these issues. With the transaction and the open offer, the company will be able to use the additional capital to work at a fuller capacity