PI Industries shares slump 8%; worst hit on Nifty500

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Given the non-fulfilment and disagreement on some of the pre-agreed conditions, PI Industries decided not to further pursue the transaction.

“The consummation of the transaction was subject to fulfilment of pre-defined conditions precedents before the Long Stop Date of October 31, 2021. Since ISLL has not been able to complete several of these pre-agreed conditions precedents, the BTA stands terminated,” the company said in an exchange filing.

The termination of the business transfer agreement wrecked the sentiment for the stock as delay in allocation towards pharmaceutical venture has dragged return rations, some analysts said.

“The company had raised QIP money since last two years, however, delay in the allocation towards pharma venture has dragged return ratios,” said ICICI Securities.

“Since the due diligence for acquisition takes time, we expect a delay in finding out the right candidate for inorganic expansion can impact return on investments in the near term, however, the long term story remains intake about the development of pharma CDMO business,” the brokerage added.

The company’s strategy to strengthen its presence in custom synthesis exports through diversification into adjacencies including pharmaceutical remains intact.

The company will continue to evaluate other merger and acquisition opportunities that are aligned to its strategic goal, PI Industries added.