The Unreported Case of Aurobindo Pharma’s Non-Compliance

By Aryaman Kapoor and Samriddhi Guha, Second Year Students at Jindal Global Law School

On August 12, 2021, the Board of Directors of Aurobindo Pharma Limited, announced its financial results for the first quarter along with the dividend. At the same time, it also announced its agreement to acquire a majority stake in Cronus Pharma Specialties India Private Limited. After this notice was made public, the stock of Aurobindo Pharma Limited spiraled down by 25% and hit a fresh 52-week low due to a decline in revenue as well as a rejection by the market of the Cronus Pharma acquisition deal due to the low revenue base. After this, on August 20, 2021, there was another notice issued by Aurobindo Pharma in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (‘LODR’), in which it was stated that the agreement to acquire Cronus Pharma was mutually terminated by both the parties and that the Board of Directors approved this termination of the acquisition. After this notice was made public, the stock of Aurobindo Pharma rebounded reflecting a positive reaction of the investors towards the termination of their plan to acquire Cronus Pharmaceuticals.

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