Why Cipla stock fell 5% in early trade

Shares of Cipla fell nearly 5% today after promoters of the pharma firm sold over 2% stake for Rs 1,844 crore in a block deal. Cipla stock fell 4.73% to Rs 910.05 against the previous close of Rs 955.25 on BSE. Cipla share trades higher than 50 day moving averages but lower than 5 day, 20 day, 100 day and 200 day moving averages.

The large cap share has gained 9.24% in one year but fallen 2.31% since the beginning of this year.

Total 210.84 lakh shares of Cipla changed hands amounting to a turnover of Rs 1,920 crore.

Market cap of the firm fell to Rs 74,468 crore.

The stock hit 52-week high of Rs 1,005 on September 29, 2021 and a 52-week low of Rs 738.25 on March 19, 2021.

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Yusuf Hamied and Mustafa Hamied promoters of the company sold 2.5% stake through a block deal today. Floor price for the block deal was fixed in a range of Rs 904.8- Rs 916.7 per share which amounts to a discount of up to 5.25% compared to Monday's closing price of Rs 955 on NSE.

Cipla in a clarification to the reports of stake sale said, "Dr. Y K Hamied, Chairman and Mr MK Hamied, Vice Chairman who are Non-Executive Directors and promoters, have sold 2,01,69,756 shares (representing 2.5% of the total issued and paid-up share capital of the Company) today. Post this transaction, the promoter group will continue to hold 34.23% in the company."

"The group remains fully committed and invested in the future of Cipla Limited. The senior promoters who are both in their eighties, intend to use the funds generated from this sale for personal purposes including philanthropy. The promoter group does not plan to sell any further shares in the foreseeable future," the company added.

For the quarter ended December 2021, eight promoters held 28.98 crore shares or 36.11% stake in the company.

YK Hamied owned 20.43% stake or 16.39 crore shares  and MK Hamied held 4.31% stake or 3.45 crore shares of the firm at the end of December quarter.

 Meanwhile, Sensex was trading 352 points higher at 56,758 and Nifty gained 93 points to 16,940 today.