Torrent inches closer to top-tier pharma status after sealing second-largest M&A deal in Indian pharmaceutical history
Torrent Pharmaceuticals kicked off the week with a jolt to Dalal Street, surging 4% in early trading on Monday after it announced the acquisition of JB Chemicals and Pharmaceuticals in a ₹25,689-crore ($3.08 billion) deal. While the stock later gave up its gains, the sentiment around the landmark transaction remained firmly positive, as analysts projected long-term benefits for the drugmaker.
With the buyout, Torrent is poised to become India’s second-most valuable pharma company, a title long held by industry heavyweights. The move also pushes the Ahmedabad-based firm deeper into the contract manufacturing and development space—an area increasingly seen as a growth engine amid global supply shifts.
It’s a big swing. And the Street’s paying close attention.
Two-Step Deal, One Big Leap
The acquisition will play out in multiple stages, but the endgame is clear—consolidation and scale.
Torrent will first buy a 46.39% stake in JB Pharma from KKR for ₹11,917 crore. The deal also includes potential purchases of up to 2.8% equity from JB employees, followed by a mandatory open offer for 26% more at ₹1,639.18 per share. If all goes through, Torrent will hold over 75% of JB Pharma, triggering a merger.
One sentence here.
Three in a row now: The transaction values JB Pharma at over ₹25,000 crore on a fully diluted basis. That’s massive—second only to Sun Pharma’s acquisition of Ranbaxy in 2015.
Market Reacts, But Profit-Taking Kicks In
Shares of Torrent Pharma popped in early trade, hitting ₹3,479, but the rally fizzled out by afternoon. Some profit-booking was expected, given last week’s 5% run-up on deal chatter.
Still, investors aren’t shying away just yet.
Brokerages remain optimistic. HSBC retained its “buy” rating on the stock, saying the merger could unlock significant synergies over time. Others echoed similar views, citing Torrent’s successful integration history and a healthier domestic portfolio.
• HSBC expects 13–15% EPS accretion from FY27
• JB Pharma’s margins seen improving post-integration
• Torrent’s combined market share could near 5% in India
“Consolidation in Indian pharma has been overdue,” said one Mumbai-based fund manager. “This deal’s a clear sign that big players are ready to step up.”
Strategic Fit: Why JB Pharma?
The acquisition wasn’t random. JB Chemicals fits neatly into Torrent’s ambitions.
For starters, JB Pharma is no small fry. It clocked over ₹3,000 crore in revenues last year, with growing international operations and a respectable domestic footprint, especially in cardiac and gastrointestinal drugs. It’s also deep into contract development and manufacturing, or CDMO—a space Torrent wants in on.
The combination gives Torrent:
| Strategic Benefit | Impact |
|---|---|
| JB’s presence in branded generics | Strengthens domestic play |
| CDMO and export markets | Diversifies revenue streams |
| Synergistic therapeutic areas | Reduces R&D overlap |
| Strong field force and network | Enhances distribution muscle |
One-sentence paragraph for flow.
This isn’t Torrent’s first rodeo either. It successfully absorbed Elder Pharma in 2014 and Unichem’s domestic business in 2017—both seen as well-executed deals in hindsight.
KKR’s Exit and What It Signals
Private equity giant KKR had picked up a controlling stake in JB Chemicals back in 2020, when the world was still grappling with COVID’s first wave. It paid ₹3,100 crore for 54% at the time.
Fast forward to 2025—and it’s cashing out at more than 3x that valuation.
Some call it smart timing. Others see it as a sign that PE firms are open to monetizing Indian healthcare bets earlier than expected, especially with valuation multiples running high and strategic buyers like Torrent in the mood to spend.
“There’s dry powder sitting across funds,” said an investment banker familiar with the deal. “And if exits like these keep happening, more pharma assets will hit the block.”
What’s Next for Torrent?
There’s still a lot to be ironed out—regulatory approvals, open offer outcomes, and employee-level stake sales. But if all goes smoothly, Torrent could emerge in a very different avatar by early next year.
Analysts believe the company may take a short-term earnings hit due to deal financing and integration costs. But they also see strong upside starting FY27, as synergies flow in and leverage reduces.
One-liner for rhythm.
Torrent has been aggressively pursuing scale since the start of the decade. This deal now positions it in a different league, with broader capabilities, deeper reach, and the kind of valuation heft that opens up more global conversations.
Whether it all plays out as expected remains to be seen—but for now, the Street seems cautiously confident.
