The sale of promoter's stake by the Singh family in Ranbaxy [Get Quote] has taken the industry by 'surprise'.

"I least expected the Singhs to sell out their stake in Ranbaxy. It came as a surprise," Elder Pharma Director Alok Saxena said.

"We did not hear about the stake sale in the market before," he said.

Ranbaxy promoter, the Singh family, sold their 34 per cent stake in the company to Japanese company Daiichi Sankyo on Wednesday for Rs 9,576 crore (Rs 95.76 billion).

USV MD Prashant Tewari said, "Nobody in the industry expected this to happen. The deal has taken everyone by surprise."

"This path breaking deal has come as a shocker to the industry. It is difficult to keep under wraps details of deals of this size, but Ranbaxy managed it" Arch Pharmalabs CMD Ajit Kamath said.

Normally, a M&A deal gets leaked, but here it did not happen, he said.

"I am feeling sad that an Indian MNC has been bought out. But our Chairman (Ajay) has been saying that the generic business is not sustainable in the long run," Nicholas Piramal [Get Quote] Director Swati Piramal said.

"We heard that some big thing is going to happen in Ranbaxy. We expected Ranbaxy to buy out some big company and not the other way around," she said.

The general feeling in the industry is that this deal would open up large valuations for Indian pharma companies.

"This deal will throw open lots of excellent opportunities for Indian companies. Now lots of Japanese companies would look at India," Saxena said.

The Japanese generics market is opening up and many Indian companies are looking at it in a big way. Many Indian companies have set up their operation there.

"Because of this one deal, the valuations of Indian pharma companies would change. More and more foreign companies will start looking at Indian companies," Saxena said.

Arch Pharmalabs, which specialises in active pharmaceutical ingredients and intermediates, said even it has been approached by foreign companies for buy out, but it has declined those offers.

"There will be a new wave of consolidation in the industry. We are also looking out for acquisition in our core areas. But we are not interested in selling our stake," Kamath said.

"Our work (Indian pharma) is recognised now," Piramal said.

USV, which is a family run pharma company, ruled out the possibility of doing something the Ranbaxy promoters have done.

"This deal will evoke lots of interest. It is a sign of things to come. But we are not looking at exiting our business," Tewari said.

Analysts and consultants see this deal as a positive one for shareholders and it may pave the way for more such deals.

"I see similar deals happening, but at a slow pace," PriceWaterhouseCoopers Associate Director Sujoy Shetty said.

High crude oil prices and inflation has been putting pressure on pharma companies, industry people said. Input costs have gone up.

"The pharma policy is not supportive to the industry. This deal is a clear signal for government to keep innovation within our borders," Swati Piramal said.

"With inflation at eight to nine per cent, we are allowed to increase the drug prices only by 10 per cent a year. So Indian companies have become vulnerable for acqusition," she said.