Strides Arcolab has not exactly been in favour on the Street following the sale of its injectables subsidiary, Agila, to Mylan last May for $1.6 billion in cash and a potential additional consideration of $250 million. Following the special dividend payment of ₹500 a share in mid-December, the stock has largely been rangebound as investors are not overtly excited about the residual pharma business because of scalability issues. However, promoter Arun Kumar continues to be bullish about the company’s prospects. While the promoters collectively hold a 27% stake in the company, Kumar, who in his personal capacity holds less than 1% stake, recently bought around 100,000 shares from the open market. Following the purchase at ₹360 a share, Kumar’s holding has marginally increased to 1.13%. While the company has received the $1.5 billion payment, Mylan has held back $250 million following the US FDA warning over violation of manufacturing norms at Agila’s sterile making facility in Bengaluru. If the issue remains contentious, it is unlikely that the sentiment around the stock will change anytime soon. In other words, Kumar may well have to keep intervening in the market to prop up the faith of investors.
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