Orchid Pharma shares touched a new 52-week high on intraday trade and locked in 5 per cent upper circuit after the Chennai-based drug maker launched a qualified institutions placement (QIP) of equity shares late last week.
Shares of Orchid Pharma opened at ₹493.50 apiece on the National Stock Exchange (NSE) on Monday, hitting the 5 per cent upper circuit and a new high against Friday’s closing price of ₹470 per share.
On Thursday, Orchid Pharma announced that its Board has approved fundraising through QIP at a floor price of ₹425.19, a 5 per cent discount of Thursday’s closing price of ₹447.65 per equity share. The shares have been locked in a 5 percent upper circuit since Friday.
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While the company did not mention the QIP size, it said its board will decide on the issue price or any discount it offers on June 27.
It is to be recalled that Dhanuka Laboratories, the promoters of Orchid Pharma, have missed the deadline to mandatorily dilute a 15 per cent stake in Orchid Pharma by March 2023 to be compliant with SEBI’s minimum public shareholding (MPS) requirement.
In June 2019, Gurgaon-based Dhanuka Laboratories took over Orchid Pharma through a corporate insolvency resolution process.
Under SEBI norms, listed companies are required to have an MPS of 25 per cent. In 2021, Dhanuka Laboratories divested 8.04 per cent equity shareholding in Orchid Pharma, bringing down the promoter stake to 89.96 per cent. The promoters should further dilute another 15 per cent to reduce their holding to 75 per cent.
In December 2022, Orchid Pharma informed exchanges that its board had approved raising ₹500 crore through a QIP programme. It had appointed investment banks Edelweiss Financial and JM Financial to handle the share sale. However, the company could not make any headway within the prescribed time limit. The latest QIP might be to meet the MPS requirement.
Last month, Stock exchanges started freezing the shares of Orchid Pharma promoters for the company’s failure to comply with market regulator MPS norms.
In a regulatory filing then, the company also said its directors have been informed that they shall not hold any new position as director in any other listed entity.