Case Study: Sequent Scientific on how Terminating Acquisition can be Helpful

SeQuent Scientific Ltd (NS: SEQU ), incorporated in the year 1985, is a small-cap company (having a market cap of Rs 1790.93 Crore) operating in the Pharmaceuticals sector.

Sequent Scientific's key Products/Revenue Segments include Bulk Drugs, Chemicals, Other Operating Revenue, Scrap, and Duty Drawback for the year ending 31-Mar-2022.

Financials for the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 378.18 Crore, up 11.72 % from last quarter's Total Income of Rs 338.52 Crore and up 4.55 % from last year's same quarter Total Income of Rs 361.72 Crore. The company reported a net loss after tax of Rs -9.78 Crore in the latest quarter.

As of 31-12-2022, the company has a total of 25 Crore shares outstanding, Promoters hold a 52.79 percent stake in the company, while FIIs owned 6.25 percent, DIIs 2.81 percent

On Wednesday 8th March 2023 SeQuent Scientific company announced that it has called off the acquisition bid for Tineta Pharma. The company announced last November that it had entered into a share purchase agreement to acquire a 100 percent stake in Tineta from its promoters. The transaction contemplated under the share purchase agreement, however, failed to materialize and hence, SeQuent will no longer acquire Tineta Pharma, according to an exchange filing on Wednesday.

Conclusion:
Investors reacted positively to the news of terminating the acquisition and hence could notice as the stock has gone up over 14 percent and hit an intraday high of Rs 71.20 on March 9 (while writing this article) upper circuit for today will be @ 74.80

However, the stock has experienced a steady decline since reaching a record high in July 2021. Since then, the stock has shed over 79 percent of its price on the back of a consistent decline in its bottom line across the recent quarter.

The major resistance will be near the 95 to 105 levels and support new the 52 weekly lows of 62 levels, however, with Any further losses in the Q4 we can see the stock tumble down to even below 50rs.

An ongoing Case study on how the termination of acquisition can be helpful for the company will be concluded at the end of Q4 ... Stay tuned 

Disclaimer: The above article is for self-educational purposes. Research conducted by the following students: G10 and Yogeeta for learning purposes.

“Investing involves substantial risk. Neither the author nor the publisher, nor any of their respective affiliates make any guarantee or other promise as to any result that may be obtained from using the research/report. While past performance may be analyzed in the research, past performance should not be considered indicative of future performance. No reader should make any investment decision without first consulting his or her own personal financial and/or investment advisor and conducting his or her research and due diligence, including carefully considering whether it is suitable for your particular circumstances, as this research/report does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendation appropriate for you. In the event, any information, commentary, analysis, opinions, advice, and/or recommendations in the research/report prove to be inaccurate, incomplete, or unreliable or result in any investment or other losses, the author, the publisher, and their respective affiliates disclaim any and all liability to the maximum extent permitted by law.”