Dr. Reddy’s Laboratories (DRL), the emerging global pharmaceutical company, has denied reports that the company’s founders were planning to offload their stake in the company to a global pharma major.
The company’s shares rose as high as 7.48 per cent on the Bombay Stock Exchange before ending at Rs. 821 on Thursday, registering a 3.65 per cent increase, following the talk of promoters of the country’s second biggest generic pharma manufacturer offloading their stake.
The shares which showed an initial gain on Friday, however, fell by 1.45 per cent to Rs. 809.25 by evening.
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“The promoters have no intention of diluting their stake. It is a pure market speculation,” a company spokesperson said when contacted. Market analysts tracking the scrip attributed the unusual movement to the talk of sale and subsequent denial by the company.
The developments in the last three months could also have influenced the market behaviour, they said.
The promoters, Dr. Reddy’s Holdings Limited, as well as founder-chairman K. Anji Reddy sold 8.5 lakh shares and one lakh shares respectively in the open market at an estimated Rs. 70 crore in June this year. Dr. Reddy’s net profit more than doubled to Rs. 244 crore and the turnover increased by 21 per cent to Rs. 1,819 crore during the first quarter ended June 30, 2009.
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Dr. Reddy’s Lab’s share had surged in mid-June on the BSE after it announced a strategic partnership with GlaxoSmithkline to develop and market select products across emerging markets outside the country.