Shares of Nectar Lifesciences Ltd tumbled 15% to ₹19.66 on Tuesday, July 8, following the company’s announcement that it has signed a definitive agreement to sell its core business division to Ceph Lifesciences Pvt Ltd for ₹1,270 crore on a slump sale basis. The stock fell sharply from its previous close of ₹23.13, reflecting investor concerns about the impact of the divestment on future earnings.
In a regulatory filing, the company said the sale covers its core business of manufacturing, distributing, and marketing active pharmaceutical ingredients (APIs) and formulations. Nectar has also agreed to sell its menthol business to Ceph Lifesciences under a separate asset purchase agreement valued at ₹20 crore.
The transaction, expected to conclude on or before September 20, 2025, is subject to shareholder and regulatory approvals. Notably, the company clarified that the shareholding pattern would remain unchanged post-transaction.
According to Chairman and promoter Sanjiv Goyal, the move aligns with Nectar’s long-term strategy to streamline operations, improve financial strength, and unlock value for shareholders. He said:
“By divesting mature segments of our business, we are laying the foundation for a focused and agile organisation geared towards innovation and long-term value creation.”
Proceeds from the deal are planned to be used for debt repayment, investments in emerging business areas, rewarding shareholders (subject to approvals), and supporting growth initiatives.
The company will seek shareholder approval at its Extraordinary General Meeting (EGM) scheduled for August 4, 2025.
Investors, however, reacted with caution to the news, sending the stock to a day’s low of ₹20.02, close to its 52-week low. The stock’s market capitalization now stands at ₹4.47 billion, and its P/E ratio is 26.54.
