Torrent Pharma eyes top tier status with Rs 25,689 crore JB Pharma deal

Torrent Pharmaceuticals has announced the acquisition of a controlling stake in JB Pharma from global investment firm KKR at an equity valuation of Rs 25,689 crore on a fully diluted basis, setting the stage for a merger that could propel the company into the top league of Indian pharma players.

The transaction, one of the largest in India’s pharmaceutical sector, will be executed in two phases. Torrent will initially acquire 46.39% of JB Pharma for Rs 11,917 crore through a share purchase agreement at Rs 1,600 per share. This will be followed by a mandatory open offer for up to 26% of the remaining shares at Rs 1,639.18. Torrent has also expressed its intent to acquire up to 2.8% from certain employees of JB Pharma.

The second phase will see the merger of the two companies through a share swap, under which JB Pharma shareholders will receive 51 shares of Torrent for every 100 shares held.

The deal marks the exit of KKR, which acquired JB Pharma in 2020 and oversaw a period of rapid growth. “This acquisition is a strategic win for Torrent, strengthening its market share, diversifying its portfolio, and entering the CDMO space, with potential to position it among India’s top pharma players.

KKR exits with substantial returns, reflecting a successful investment cycle. For JB employees, the deal offers financial benefits for some and growth opportunities within a larger entity, though integration uncertainties remain,” said Salil Kallianpur, a pharmaceutical analyst.

With a combined annual revenue projected to exceed Rs 15,000 crore post-merger, Torrent aims to consolidate its presence in chronic therapies while expanding its contract development and manufacturing (CDMO) capabilities—a growing segment globally. JB Pharma brings leading brands in hypertension and strong international presence, especially in Russia and South Africa, along with CDMO operations in medicated lozenges.

Torrent’s past acquisitions—Elder Pharma, Unichem’s domestic business, and Curatio Healthcare—have helped expand its reach in India’s chronic care market. Analysts note that integrating JB Pharma will be a larger undertaking.

“For Torrent in India, the merger promises significant revenue and profitability growth, but success hinges on effective integration, funding clarity, and navigating competitive pressures, which Torrent displayed with Elder, Unichem and Curatio. The deal’s long-term impact will depend on Torrent’s execution and ability to realise synergies in a dynamic market,” Kallianpur added.

The funding mix for the acquisition includes internal accruals and debt, although specific financing details have not been disclosed. Torrent is said to generate over Rs 1,000 crore in free cash flow annually and maintains a healthy balance sheet.

“Torrent’s deep India presence and JB Pharma’s fast growing India business, combined with the CDMO and international footprint offers immense potential to scale both revenue and profitability. This strategic alignment furthers our goal of strengthening our presence in the Indian pharma market, and build a larger diversified global presence. Moreover, the CDMO platform provides a new long-term avenue of growth for Torrent,” said Samir Mehta Executive chairman, Torrent.

“Torrent’s track record in extracting value from acquisitions has been extraordinary and is well reflected in the existing return ratios. The JB acquisition is larger than those in the past, but manageable as far as their balance sheet strength is concerned,” said Vishal Manchanda, Vice President – Institutional Research, Systematix Group.

JB Pharma’s CEO Nikhil Chopra, who will continue to lead operations, noted that the company has consistently delivered industry-leading growth and margin improvement. “The combined strengths of our organisations will unlock greater opportunities to enhance healthcare access across our markets,” he said.

While the deal awaits regulatory approvals from SEBI, the Competition Commission of India, stock exchanges, and the NCLT, it is being closely watched as a bellwether of further consolidation in India’s fragmented pharma sector.

The Torrent–JB Pharma transaction comes at a time when India’s pharmaceutical sector is witnessing increased consolidation, as companies seek scale, therapeutic depth, and entry into adjacent segments such as CDMO and consumer health.

In recent years, Torrent has pursued a string of acquisitions—including Elder Pharma’s domestic formulation business in 2013 for Rs 2,004 crore, Unichem’s domestic branded formulations in 2017 for Rs 3,600 crore, and Curatio Healthcare in 2022 for Rs 2,000 crore—each strengthening its presence in chronic and sub-chronic therapies.

Meanwhile, other Indian firms have also been active: Dr. Reddy’s acquired select brands from Wockhardt in 2020 and Mayne Pharma in 2023; Mankind Pharma bought Panacea Biotec’s formulations business in 2022; and Cipla acquired South Africa’s Actor Pharma and launched a consumer health joint venture with API Holdings. Globally, large CDMO deals have also accelerated, including Catalent’s buyout by Novo Holdings and Thermo Fisher’s acquisition of several smaller CDMO firms.