Granules India rises on divestment plan in China JV

Granules India on Monday session gained nearly 2 per cent intraday on the announcement of divestment in its Joint Venture (JV) located in China.

The company informed the exchanges that it is planning to divest its entire equity stake in Granules Biocause Pharmaceuticals, by selling its stake to joint venture partner. Granules Biocause Pharmaceuticals is 50:50 joint venture between Granules India Limited and Hubei Biocause Heiien Pharmaceutical.

Granules India has formed the JV in 2007 to ensure a regular supply of ibuprofen API to support its requirements for manufacturing Pharmaceutical Formulation intermediates and Finished Dosages.

The major reason for this divestment is environmental issues in China. Granules Biocause Pharmaceuticals had invested to comply with regulatory issues on pollution, but this was conflicting to Granules India’s strategy of reducing Capex outflow and Free Cash Flow generation.

On Monday, the stock of Granules India opened at Rs. 101.25 against the previous close of Rs. 101.00. It made an intraday high of Rs. 103.25 on the BSE and a low of Rs. 100.00. Its 52-week high stands at Rs. 120.00 and 52-week low at Rs. 79.00. At 12:59 hours, the stock was trading at Rs. 101.30, up by 0.30 per cent in BSE.