Torrent Pharma to acquire controlling stake in JB Chemicals from KKR

Mint

21 hours ago

Ahmedabad-based drugmaker Torrent Pharmaceuticals is set to acquire a controlling stake in JB Chemicals and Pharmaceuticals (JB Pharma) from global investment firm KKR, at an equity valuation of ₹25,689 crore. The deal will be followed by a merger of the two entities, the company announced on Sunday evening.
The deal will strengthen Torrent's presence in the Indian market, as well as facilitate its entry into the fast-growing contract development and manufacturing (CDMO) segment.
Torrent will acquire a 46.39% equity stake (on a fully diluted basis) in JB Pharma through a share purchase agreement for ₹11,917 crore at ₹1,600 per share, followed by a mandatory open offer to acquire up to 26% of the company's shares from public shareholders, at an open offer price of ₹1,639.18 per share. Torrent also intends to acquire up to 2.80% of equity shares from certain employees of JB Pharma at the same share price as KKR, the company said in a release.
The investment in JB Pharma yielded an over 5x return for KKR with a gross internal rate of return of about 36%, a person aware of the development, who did not wish to be quoted, told Mint.
KKR has had a strong track record of healthcare investments in India, including a $600 million financing to Manipal Group recently and a 5x return on its investment in Max Healthcare in 2022.
The acquisition will be followed by a merger between Torrent and JB Pharma through a scheme of arrangement.
JB Pharma's shares rose 2.3% to ₹1,792.20 apiece, while those of Torrent Pharma settled 4.7% higher at ₹3,375 on the NSE on Friday.
The acquisition will provide Torrent access to a fast-growing India franchise, with JB's leading brands in the chronic segment, and entry into untapped therapeutic areas like ophthalmology, strengthen Torrent's market share in the Indian market, and facilitate its entry into the CDMO segment. It will also aid consolidation in key international markets, the company said.
'Torrent's deep India presence and JB Pharma's fast growing India business, combined with the CDMO and international footprint, offers immense potential to scale both revenue and profitability," Samir Mehta, executive chairman, Torrent Pharmaceuticals, said in the statement. 'Moreover, the CDMO platform provides a new long-term avenue of growth for Torrent," he added.
Torrent Pharma was engaged in prolonged talks to acquire KKR's stake in JB Pharma last year. The deal, however, fell through over valuation concerns.
KKR acquired a 54% stake in JB Pharma from the promoters, the Mody family, in July 2020 for about ₹3,100 crore, or ₹745 per share.
The investment firm sold over 5% of stake in the company in March 2025 through block deals for ₹1,459 crore, bringing its holding down to 47.84%.
Torrent Pharmaceuticals has grown over the years through inorganic moves. In 2017, it acquired women's healthcare brands from Novartis, as well as Unichem's Indian branded business along with its Sikkim plant. In 2022, it acquired Curatio Healthcare for ₹2,000 crore.
In an interview with the Economic Times earlier this month, Torrent's managing director-designate Aman Mehta said the company is aiming to be one of the top three pharma companies in the Indian market in the next three to five years.
JB Pharma is one of the fastest growing pharma companies in India, and comes with flagship brands such as Cilacar, Metrogyl, Nicardia and Rantac. The company also exports its finished formulations to over 40 countries, including the US, and is a leading CDMO player in the segment of medicated lozenges.
JB Pharma recorded revenue of ₹3,918 crore in FY24-25, growing 12% year-on-year. Of this, its revenue from the domestic market was ₹2,269 crore, growing 20% YoY.
'Over the past five years, JB Pharma has emerged as one of India's fastest growing pharmaceutical players, owing to KKR's strategic guidance, stewardship of our independent directors and a focused strategic and executional excellence by the management team. We have built a strong foundation to deliver market-leading growth as well as consistent improvement in profitability in the medium and long term," said Nikhil Chopra, chief executive officer and whole time director of JB Pharma.