Shares of agrochemical firm PI Industries fell sharply after its deal failed with active pharmaceutical or API maker Ind Swift Laboratories. However, shares of Ind Swift Laboratories were blocked in 10% of the upper circuit of ??67.40. Shares of PI Industries fell about 8% to ??2,756 on ESB. PI Industries stocks have been a multibagger stock in the chemical space, yielding 2,800% returns over the past 10 years.
In July of this year, PI Industries Limited (PI) had signed a Business Transfer Agreement (BTA) with Ind-Swift Laboratories Limited (ISLL) for the acquisition of their trading business API and Intermediates on a going concern basis. ‘exploitation.
PI Industries in a November 1 press release stated that the completion of the transaction was subject to the fulfillment of predefined conditions precedent prior to the long shutdown date of October 31, 2021. Pre-agreed conditions precedent, the BTA is terminated, “a PI Industries said in a statement today. “
However, PI Industries said its strategy to strengthen its presence in exports of custom syntheses through diversification into adjacencies, including pharma, remains intact and the company “will also continue to assess other merger opportunities and acquisition that are aligned with its strategic direction with the intention of creating a differentiated scale. play in the pharmacy. “
PI Industries also said that the R&D facility within the company “remains attentive to the development and scale-up of several advanced technologies, processes and platforms to execute its long-term strategy. “.
When the Ind-Swift Laboratories deal was announced in July, PI Industries said it envisioned the pharmaceutical vertical as one of the key pillars for future growth. “It aims to create a differentiated position in the pharmaceutical industry by leveraging its core competencies in complex chemistry, operational excellence, technology platforms and global reach through a partnership with a leading innovator,” the company said in a July 31 press release.
Ravi Singh, director of research and vice president of ShareIndia, said: “The IP industries peaked at 3,535 on September 17 of this year and today they are around 22% of the highest. low. Strong support stands at 2,500 levels and due to the impact of this news, we expect PI Industries to test its support in future trading sessions. “
“The market was expecting a 6-7% increase in profits through this deal, so we’re seeing a big drop after the deal is terminated. We are seeing negative feedback in stock due to this news. However, the overall fundamentals are still strong for this company and it is one of the top quality agrochemical companies, ”said Santosh Meena, Research Manager, Swastika Investmart.
Technically, he’s sitting at his 200-DMA’s ??2750 and “if he manages to maintain that level, we can expect a rebound. Otherwise, he may see more correction towards the ??2500 level and that would be a great buying opportunity, ”added Meena.
In a statement, Ind Swift Laboratories said its ISLL board of directors at its November 1 board meeting discussed the matter and decided not to extend the long shutdown date.
“When it comes to news for investors, now is a great time to accumulate stocks, because bad news generates good profits if the long-term economics of business has no impact. PI industries over the past 10 years provide 30% CAGR to its investor. The business is almost debt free and recently its cash flow has increased at a rapid rate, ”said Ankit Yadav, Wealth Manager (US) and Director of Market Maestroo.
According to Yadav, the decline is a good opportunity for investors to build up the business over the long term.
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