Shares of Bangalore-based drug maker Strides Arcolab plunged about 18 per cent on Thursday, as uncertainty heightened on whether the company would sell off its unit Agila Specialties. Through the last few months, the market has been abuzz with speculation the company is in talks with Pfizer to sell Agila, its injectable-medicines division.
In December, investors had expected the company to announce the sell-off by January-end. But in the absence of clarity on the deal, investors, who have been holding on to the stock, have turned impatient, with some raising doubts on the company's plan. So far, Strides and Pfizer have not commented on the speculations.
On Thursday, the Strides Arcolab stock touched Rs 865, before closing at Rs 916.8 on the BSE, down 12.5 per cent. About 13,00,000 shares were traded on Thursday, against the two-week daily average of 1,00,000. Brokers said heavy selling mid-way through the session triggered margin calls by brokers, as many traders had borrowed to invest in the stock. On Dalal Street, there was talk some brokers had sold margin-based positions.
On Thursday, delivery volumes stood at just 20 per cent of the total activity, indicating some traders sold in the morning and bought back at lower levels in the evening.
For the nine months ended September 2012, Agila Specialties’ revenue had surpassed the Rs 1,000-crore mark. Agila contributes 60 per cent to Strides Arcolab’s revenue. According to reports, Agila may be valued at $2 billion (Rs 10,645 crore).