- 11 Jul 2022
- ICICIdirect Research
Eugia sale hits valuation mismatchAUROPHARMA - 518 Change: 17.20 (3.44 %)
News: According to The Economic Times, Aurobindo Pharma has abandoned proposed sale of Eugia Pharma due to valuation differences with potential buyers. Eugia consists of general injectable, oncology injectable, oncology oral solids, and hormonals and according to media sources, promoters were valuing the business at ~ Rs 26,000-30,000 crore (US$3.4 - 4 billion).
Views: Aurobindo’s injectables business was at US$438 million in FY22 and is expected to continue double-digit growth in FY23 and FY24 amid guidance of US$650-700 million for the specialty business by FY24. In May 2021, Aurobindo approved the transfer of its injectable assets into Eugia Pharma to augment fundraise and strategic tie-ups in future. Irrespective of restructuring, we remain positive on Aurobindo’s specialty portfolio under Eugia, however diminishing possibility of value unlocking through Eugia spin-off is likely to weigh down on sentiments in near term.