Gujarat Themis Biosyn’s Credit Rating Placed on Watch Amid Major Acquisition Plans

Gujarat Themis Biosyn’s Credit Rating Placed on Watch Amid Major Acquisition Plans​

CARE Ratings Limited has assigned ratings for the bank facilities of Gujarat Themis Biosyn Ltd (GTBL) as ‘Care BBB (RWN)’ for Long Term Bank Facilities and ‘Care A3+ (RWN)’ for Short Term Bank Facilities. Both assignments are currently placed on "Rating Watch with Negative Implications," reflecting concerns surrounding the company’s proposed large scale acquisitions in the near to medium term, alongside uncertainties related to the funding structure for these transactions.

The rating assessment was conducted by CARE Ratings Limited. The facilities and associated ratings are detailed below:


The rating agency noted that the concerns primarily revolve around GTBL’s ambitious growth plans, which include a proposed acquisition of 100% equity shareholding in MicroBiopharm Japan Co., Limited (MBJ) via its subsidiary, Themis Biosyn Japan Limited. This MBJ acquisition carries a total purchase consideration of ¥1.5 Billion (approximately ₹1,300 crore) and is scheduled for completion by Q2FY27. Furthermore, GTBL signed an asset purchase agreement with Sanofi to acquire a portfolio of anti-tuberculosis and anti-infective brands at a cost of €158 million (approximately ₹1,700 crore).

The company’s strategy necessitates raising funds through Qualified Institutional Placement (QIP) amounting to ₹1,000 crore, which is viewed as critical for the successful completion of the MBJ acquisition.

Financial Performance and Operational Status​

While GTBL faces risks related to its massive growth plans, the agency acknowledged several operational strengths, including having experienced promoters and a niche product portfolio. The company’s financial health indicators show stability alongside increased debt exposure due to capital expenditure (capex) utilization.

Key financials for GTBL are presented below:


The rating agency noted that the company's niche offerings, such as manufacturing intermediates Rifamycin S and Rifamycin O, have historically supported healthy profit margins, with PBILDT remaining between 45% and 50% for five years ending FY26. The company also maintains comfortable capital structure and debt coverage indicators despite moderation in gearing and interest coverage ratios due to increased term loans taken to fund capex.

Key Risks and Corporate Response​

CARE Ratings Limited highlighted several constraints on the company’s ratings, including its moderate scale of operations (with TOI at ₹167.23 crore in FY26), working capital intensive operations, and project execution risk associated with setting up hybrid power generation units and stabilizing new fermentation capacities.

In addition to these operational challenges, GTBL is undertaking significant strategic initiatives:

• API Integration: The company completed the forward integration of API manufacturing capex for Rifampicin, Rifapentine, and Rifaximin, with trial production commencing in Q4FY26.
• Power Generation: A hybrid power generation capex project of 18 MW (9 MW solar and 9 MW wind) is underway and expected to go live from August 2026.

The company also faces customer concentration risks; however, the availability of a "take or pay" agreement with Lupin Limited has mitigated this exposure.

Company's Formal Protest Against Rating Decision​

Gujarat Themis Biosyn Limited formally protested the rating decision delivered by CARE Ratings, stating that its appeal was unsuccessful. GTBL lodged a comprehensive rebuttal, viewing the agency’s determination as overly backward-looking and failing to incorporate structural de-risking mechanisms.

The company argued that the agency overlooked a concrete roadmap for raising ₹1,000 crore through QIP when evaluating liquidity risk. Furthermore, GTBL contended that the rating, which relied on leverage metrics, failed to account for the forward-looking cash flows expected from its global acquisition plans. As an official statement of dissent, GTBL instructed the agency to ensure that any publication explicitly flags that the rating "Has not been accepted by the Issuer."

GUJTHEM Stock Price Movement​

Gujarat Themis Biosyn Limited shares today slipped by 1.79%, concluding the trading session at ₹363.95 after posting a notable decline. The stock saw movement during the day, falling to a low of ₹362.40 but peaking at a high of ₹374.65.