Aurobindo Pharma shares tumble almost 5% on reports of Zentiva acquisition bid; company issues clarification

Aurobindo Pharma shares declined nearly 5 percent to ₹1,039 apiece on August 20 after reports suggested that the company had emerged as the frontrunner to acquire Prague-based generic drugmaker Zentiva from Advent International. The potential deal, valued at $5-5.5 billion ( ₹43,500-47,900 crore), would mark the largest-ever acquisition by an Indian pharmaceutical company, both within India and overseas.

If concluded, the transaction would surpass previous landmark pharma deals, including Daiichi Sankyo’s $3.2 billion acquisition of Ranbaxy in 2014 and Biocon Biologics’ $3.3 billion cash-and-stock purchase of the global biosimilars business of US-based Viatris. Reports highlighted that the Zentiva buyout could strengthen Aurobindo’s footprint in Europe, particularly in Eastern European markets such as the Czech Republic, Romania, and Slovakia—regions considered promising growth areas for biosimilars as patent expiries of major prescription drugs accelerate.

Responding to the reports, the Pharma company issued a statement under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company said it routinely explores strategic opportunities, including acquisitions and partnerships, to enhance shareholder value. However, it stressed that no binding agreement or definitive decision had been approved by the board in relation to the reported transaction.

Aurobindo added that the news should be treated as premature and not be relied upon. It assured that any definitive development requiring disclosure would be promptly communicated to the stock exchanges in line with regulatory requirements.

On the financial front, Aurobindo Pharma posted a consolidated net profit of ₹824 crore in the June 2025 quarter (Q1 FY26), a decline of 10.2 percent year-on-year compared with ₹918 crore in Q1 FY25. Revenue from operations, however, grew four percent to ₹7,868 crore from ₹7,567 crore a year earlier.

Operating EBITDA stood at ₹1,603 crore in Q1 FY26, marginally lower than ₹1,619.6 crore in Q1 FY25. EBITDA margin contracted to 20.4 percent from 21.4 percent in the year-ago period.

Regionally, US formulations revenue fell 1.9 percent year-on-year to ₹3,488 crore ($408 million), impacted by destocking and seasonal headwinds. Meanwhile, European formulations revenue registered robust growth of 18 percent year-on-year to ₹2,338 crore.

The stock hit an intraday low of ₹1,039.30, marking a 4.7 percent decline. Over the last 12 months, Aurobindo Pharma’s shares have shed more than 28 percent, with a year-to-date fall of 22 percent in 2025, reflecting persistent investor caution.

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