1:5 Split: Mega Pharma Makes Big Acquisition Update; LIC's 92,10,387 Shares To Become 4,60,51,935 Shares; BUY?

Dr Reddy's Laboratories, a pharma giant with large status, trended on August 2nd after making an acquisition announcement ahead of its 1:5 shares sub-division. The stock ended near its 52-week high on exchanges. Upon the completion of its stock split, India's PSU life insurer LIC will be the biggest winner.

LIC's shareholding in Dr Reddy's will multiply by five-fold.

On BSE, Dr Reddy's Lab ended at Rs 6960 apiece, up by 0.95% with a market cap of Rs 1,16,108.04 crore. The stock was near its 52-week high of Rs 7,030 apiece on the exchange. The return on equity by Dr Reddy's is strong at 17%.

Dr Reddy's Lab Acquisition Update:

Firstly, the pharma giant announced that Dr Reddy's has invested Rs. 7,34,34,90,000/- in a joint venture, Dr Reddy's and Nestlé Health Science which is between Dr Reddy's Lab and FMCG giant Nestle India.

Accordingly, Dr Reddy's Lab allotted 73,43,49,000 Equity shares of Rs. 10/- each, at par, to the Company, on August 1, 2024. Further, the JV Company has also allotted 70,55,51,000 equity shares of Rs. 10 each, at par, amounting to Rs. 7,05,55,10,000/- to Nestlé India, on August 1, 2024.

Post the allotment, Dr Reddy's continues to hold 51% share capital, i.e., 73,44,00,000 Equity shares of Rs. 10/- and Nestlé India will also continue to hold 49% share capital, i.e., 70,56,00,000 Equity shares of Rs. 10/- in the said JV Company.

Also, the company has entered into a definitive and conclusive License Agreement ("Agreement") with JV Company, to permit the JV Company to undertake business about the Company's licensed products, in the territory of India and Nepal.

Another acquisition update is that Dr Reddy's Lab's wholly-owned subsidiary, Aurigene Oncology has invested Rs. 2,08,62,912/- in Clean Renewable Energy KK 2A Private Limited ("CREL") and CREL has allotted 20,21,600 equity shares of Rs. 10 each at a premium of Rs. 0.32/- per share to AOL on July 31, 2024.