Glenmark Pharma (GNP) is divesting 75% stake in its API arm Glenmark Lifesciences (GLS) for INR 56.5bn (INR 615 per share) to Nirma Limited valuing GLS at 11.7x FY25E EPS and 6.4x EV/EBITDA. GNP, though, will still hold nearly 7.8% stake in Glenmark Lifesciences. The proceeds from the transaction will be used to pare off debt (INR 43.4bn at the end of FY23) of GNP. We believe the proposed transaction may have a negative impact of 10% on FY25E revenue (of INR 172bn) and EBITDA margin may shrink 150bps, though, repayment of debt may partially offset the impact.