Bain Capital, LP has approached Dr. Reddy's Laboratories Limited (BSE:500124) (DRL) to explore a joint bid to buy out the promoters of Cipla Limited (NSEI:CIPLA), the Hamied family. Last week, senior leadership from both sides met along with their advisors to discuss and formalise a strategy, said people aware of the development. DRL is believed to be evaluating the opportunity and countering the offer by Torrent Pharmaceuticals Limited (BSE:500420), currently the sole Indian strategic investor in the fray.
Torrent has submitted a non-binding bid for the Hamieds' stake in the 88-year-old company, competing against PE firms Blackstone Inc. (NYSE:BX) and Baring Private Equity Asia-EQT (BPEA-EQT). Bain Capital is also one of the PE funds that Torrent has been in discussions with to raise as much as INR 83 billion ($1 billion) as part of its financing plan for a potential $7 billion plus buyout, the largest ever in India, ET reported September 1. If DRL decides to participate, then not only will it enhance the competitive bidding landscape for Cipla but a merged entity would become the number two Indian-origin pharma major at home by revenue, with a consolidated market share of 8% (based on June 2023 IPM data) and also in the US and emerging markets.