Exclusive | Torrent Pharma likely submitted non-binding bid to acquire stake in Cipla

In a bid to potentially bolster its position, Torrent Pharma is exploring avenues to form a consortium with other private equity funds such as Blackstone and Bain PE Asia-EQT among the prospective collaborators, along with international institutions to ensure the realization of their strategic aspirations.

An earlier report had hinted at Torrent Pharma's interest in acquiring the Hamied family's stake in Cipla, which currently stands at 33.47 percent. Preliminary estimations indicate that the potential new owner might need to commit an investment of approximately $7.06 billion to secure a 59.47 percent stake.

Torrent Pharma has identified a minimal overlap of around five percent in India sales between itself and Cipla. The company, boasting a market capitalisation of Rs 624.09 billion, views Cipla's presence in both the Indian and US markets as a promising avenue for synergy.

Torrent believes the geographical access is the key. For example, the India portfolio overlap is limited to five percent, Torrent would also get access to the US market which is over five times larger than Torrents and access to other markets such as South Africa.

CNBC-TV18 reached out to both Torrent and Cipla, and is awaiting comments.

If the deal goes through, this would become the largest Indian pharma deal in nearly a decade. However, Chairman YK Hamied, in his address at Cipla's Annual General Meeting, called any potential developments with regards to promoter stake sale as 'speculative.'

In case the deal is done, the merged entity will become the second-largest pharma company in India, second only to Sun Pharma in terms of revenue.