On April 26, Ipca Laboratories’ shares fell to a fresh 52-week low in early trade as it plans to acquire a stake in Unichem Laboratories that endured an overhang on the stock.

Ipca plans to acquire a 33.38% stake in Unichem Labs, pricing at Rs 400 per share, aggregating around Rs 1,034.06 crore. The company will buy an additional stake of 26% through an open offer priced at Rs 440 per share.

Since Ipca’s buy and open offer are valued at over 3% and 13% premium to Unichem’s closing price on Monday.

Brokerage firm ICICI Securities said that with 2.4x TTM FY23 sales, the deal was a bit costlier given the lower profitability of Unichem’s exports-driven business.

Consequently, Ipca shares nosedived by 10.33% on Tuesday. The stock downslide extended to the second session. At 9.57 am, Ipca Laboratories’ shares traded with a cut of 4.87% at Rs 705.05 on the NSE.

Ipca Labs shares record a fresh 52-week low of Rs 697.40 earlier in the day. Around 20 lakh shares also changed hands on the exchanges. Trading volumes rose sharply in the last session as around 82 lakh shares exchanged hands.

Motilal Oswal Financial Services said the acquisition would enable Ipca’s re-entry into the US generics market, aiding synergy through cross-selling portfolios in the export market. However, the firm considers that increased competition in the oral solids US generics market and no USFDA reviews at Unichem’s sites since February 2020 also lays the outlook on the business at risk.