Sanofi India has received a show cause notice from the Karnataka Goods and Services Tax authorities demanding ₹23.74 crore in tax and interest for the fiscal year 2023.

The notice, dated September 25, 2026, was issued by the Commercial Tax Officer (Audit)-6.1, DGSTO-6, Bengaluru, under Section 73 of the Karnataka Goods and Services Tax Act, 2017. The authority alleged that the company availed excess Input Tax Credit (ITC) during the period from April 2022 to March 2023.

Breakdown of Demand

The total liability proposed by the tax officer comprises two components:

The company stated that it is currently examining the notice in consultation with its consultants and tax advisors. Sanofi India indicated that it will submit a reply within the prescribed time period after reviewing the relevant facts on which the demand is based.

Company Response and Impact

In its disclosure to the stock exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company clarified its stance on the potential financial impact.

• The company does not envisage any adverse impact on its financials, operations, or other activities arising from this show cause notice.
• The disclosure was made available on the company’s website alongside the filing with BSE and NSE.

What the Numbers Show

The demand highlights a significant divergence between the principal tax amount and the accrued interest. Interest of ₹9.31 crore accounts for approximately 39% of the total claimed amount of ₹23.74 crore. This high interest component relative to the base tax suggests a prolonged period of non-compliance or dispute resolution since the FY23 period ended, reflecting the compounding nature of statutory interest over the three-year gap between the alleged violation and the current notice.

Sanofi India Limited witnessed a significant internal restructuring as promoter Hoechst GmbH transferred 3.5 million equity shares to Sanofi Healthcare India Private Limited on September 24, 2026.

The transaction, executed through a block deal mechanism on the stock exchange, represents an inter-se transfer within the promoter group. The acquirer is exempt from making an open offer pursuant to Regulation 10(1)(a)(iii) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Transaction Details

The transfer involved 3,500,000 equity shares, constituting 15.20% of the company's total share capital. Hoechst GmbH’s direct stake decreased from 60.38% to 45.18%, while Sanofi Healthcare India Private Limited moved from nil holdings to a 15.20% stake.

The volume-weighted average market price of Sanofi India shares over the 60 trading days preceding the notice issuance was ₹3,228.06 per share. The acquirer confirmed that the acquisition price would not exceed 25% above this computed benchmark.

What the Numbers Show

The restructuring consolidates promoter holdings through a significant shift in ownership structure without altering the total promoter group shareholding. While Hoechst GmbH’s direct stake drops by 15.20 percentage points, the aggregate promoter and promoter group holding remains unchanged at 60.40%.

This internal realignment changes the specific entities controlling the voting rights but maintains the overall control structure. The transfer was disclosed under Regulation 29(2) of the SAST Regulations, confirming the transaction mode as an inter-se transfer among members of the promoter and promoter group.