Zydus Lifesciences has announced another extension for its planned acquisition of Sterling Biotech Limited's (SBL) Active Pharmaceutical Ingredients (API) business. The company has now extended the closing date to June 30, 2026, marking the second extension since the original agreement was signed.

Timeline of Extensions

The acquisition timeline has seen multiple adjustments since the initial agreement. The following table outlines the progression of deadlines:

Reasons for Latest Extension

According to the company's latest regulatory filing dated December 24, 2025, Sterling Biotech is still working to complete certain conditions precedent outlined in the Business Transfer Agreement. Zydus Lifesciences stated that "SBL is still in the process of completing certain conditions precedents of the BTA and hence the Company and SBL have executed a letter to extend the closing date by June 30, 2026."

Transaction Details

The acquisition involves Sterling Biotech's API business, which represents a strategic expansion for Zydus Lifesciences in the pharmaceutical ingredients sector. The deal remains subject to the completion of various conditions precedent as specified in the original Business Transfer Agreement.

Regulatory Compliance

The company has maintained transparency throughout the process, informing stock exchanges about each development in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The latest update was communicated to both BSE Limited and National Stock Exchange of India Limited.

Strategic Outlook

Despite the extended timeline, Zydus Lifesciences remains committed to completing the acquisition. The company expressed confidence that "the transaction is expected to be completed on or before June 30, 2026." The repeated extensions suggest the complexity of fulfilling all prerequisite conditions while maintaining the strategic value of the deal for both parties involved.

Zydus Life Science , a prominent pharmaceutical company, has received a significant financial reprieve as tax authorities have withdrawn a substantial tax demand. This development marks a positive turn for the company, alleviating a considerable financial liability.

Tax Demand Details

Zydus Lifesciences announced that CGST authorities have concluded proceedings on tax demands totaling ₹39.25 crore. The authorities have dropped demands worth ₹35.90 crore while confirming a liability of ₹3.35 crore plus interest and penalty.

Resolution and Remaining Liability

The company had received show-cause notices from central excise and service tax authorities regarding alleged wrongful availment of CENVAT credit on input services from March 2008 to June 2017. Following the resolution:

• The majority of the demand, amounting to ₹35.90 crore, has been dropped.
• A liability of ₹3.35 crore, plus applicable interest and penalties, has been confirmed.

Specific Demand Details

The confirmed ₹3.35 crore demand relates to CENVAT credit on sales commission paid to foreign entities, which was treated as business auxiliary services.

Company's Response

Zydus Lifesciences has stated its intention to challenge the order by filing an appeal. The company maintains that there is no material financial impact on its operations from this remaining liability.

Market Response

Following this announcement, shares of Zydus Lifesciences closed at ₹1,018.90, down 1.57%.

Implications

The withdrawal of the larger tax demand is a positive development for Zydus Lifesciences, reducing uncertainty and potentially freeing up resources that might have been set aside for tax liabilities. However, the company still faces a smaller, yet significant, tax liability of ₹3.35 crore plus interest and penalty. The company's decision to appeal this remaining demand suggests confidence in its position, but the outcome of this appeal process remains to be seen.