Orchid Chemicals soaring on Takeover battle

Orchid Chemicals & Pharmaceuticals surged 12.12% to Rs 369.15 at 11:19 IST on BSE after 1.9% of the company’s equity changed hands on the counter on BSE.

The stock hit a high of Rs 323.90 and a low of Rs 285 so far during the day. The stock had a 52-week high of Rs 328 on 17 January 2008 and a 52-week low of Rs 106.50 on 24 March 2008.

The company’s current equity is Rs 65.85 crore. Face value per share is Rs 10.

The current price of Rs 369.15 discounts its Q3 December 2007 EPS of Rs 32.88, by a PE multiple of 11.22.

Orchid Chemicals & Pharmaceuticals’ net profit rose 91.1% to Rs 54.12 crore on 39.4% growth in net sales to Rs 332.69 crore in Q3 December 2007 over Q3 December 2006.

A total of 12 lakh shares (1.90% of the company’s equity) changed hands on Orchid Chemicals & Pharmaceuticals counter on BSE through multiple block deals on the BSE at an average price of Rs 302.40 per share.

On Tuesday, 15 April 2008, foreign fund Morgan Stanley picked up 0.50% stake in the company for Rs 8.90 crore in open market transactions. The global financial major Morgan Stanley bought 3.30-lakh shares on the BSE and 4.2-lakh shares on the NSE through bulk deals.

Orchid Chemicals & Pharmaceuticals shares have been witnessing heightened activity recently amidst speculations of its takeover by a Ranbaxy promoter group firm. Recent media reports that stated that Solrex Pharmaceuticals, a privately-held firm linked with Ranbaxy promoters, has hiked its stake to 14.7% via creeping acquisition route through a slew of block deals since 31 March 2008 taking it very close to triggering an open offer. The relatively low promoter holding at 15.87% on the other hand makes it vulnerable to a hostile takeover bid.

On 20 February 2008, Orchid Chemicals & Pharmaceuticals received approval from the US Food & Drug Administration (US FDA) for its abbreviated new drug application for cefuroxime axetil tablets.

In January 2008, the company announced that its formulation facilities, comprising of cephalosporin and penicillin plant had received approved by the Medicines Control Council, South Africa.

The company is engaged in manufacturing and selling pharmaceuticals ingredients and finished dosage forms. It focuses on the cephalosporin range of antibiotics. The company exports to Asia Pacific, Europe, Middle East, South and Central America, North America and Commonwealth of Independent States (CIS) Countries.